Vashisht Family Pty Ltd atf the Vashisht Family Trust v ADDS (NSW) Pty Ltd; ADDS (NSW) Pty Ltd v Vikas Vashisht

[2021] NSWSC 1185

Supreme Court

New South Wales

Medium Neutral Citation:

Vashisht Family Pty Ltd atf the Vashisht Family Trust v ADDS (NSW) Pty Ltd & Ors; ADDS (NSW) Pty Ltd & Ors v Vikas Vashisht & Anor [2021] NSWSC 1185

Hearing dates:

12 August 2021

Date of orders:

17 September 2021

Decision date:

17 September 2021

Jurisdiction:

Equity

Before:

Slattery J

Decision:

The question of granting access to the questioned communications by or on behalf of the plaintiffs with the joint solicitor should be determined under the common law relating to legal professional privilege. The questioned communications are all subject to litigation privilege and common law, which is not diminished by the plaintiff and the defendants retaining the joint solicitor. The defendants should pay the plaintiffs’ cost of the Motion for access to the questioned communications.

Catchwords:

EVIDENCE – Privileges – Client Privilege – litigation privilege – common interest privilege – the defendants and their associated entities sold certain rural roadside service stations to the plaintiffs and their associated entities in a complex suite of transactions – the plaintiffs and the defendants engaged the same solicitor for the transaction (“the joint solicitor”) – the plaintiffs sued the defendants for specific performance of one of the suite of agreements made between them, alternatively for damages for breach of contract and for misleading and deceptive conduct – the defendants cross-claim for misleading and deceptive conduct, for amounts said to be due as a result of the taking of accounts between the parties and for declarations that they have validly terminated a sale agreement for one of the service stations – from a time shortly before and then for about two months after the plaintiffs commenced these proceedings their solicitor communicated with the joint solicitor (“the questioned communications”) – the defendants subpoenaed the questioned communications from the joint solicitor and now seek access to them – whether the question of granting access to the questioned communications by or on behalf of the plaintiffs with the joint solicitor should be determined under the common law relating to legal professional privilege or by the application of client privilege under Evidence Act 1995, s119 – whether the questioned documents attract legal professional privilege or client privilege – whether any common law legal professional litigation privilege has been waived, or whether any client privilege that would otherwise arise under Evidence Act 1995 s 119 has been lost, by reason of the plaintiffs and the defendants retaining the joint solicitor.

Legislation Cited:

Evidence Act 1995, ss 119, 124 and 131A

Uniform Civil Procedure Rules2005, r 1.9

Cases Cited:

Carbotech-Australia Pty Ltd v Yates [2008] NSWSC 1151

CDPP v Kinghorn (2020) 102 NSWLR 72

Farrow Mortgage Services Pty Ltd (In Liq) v Webb (1996) 39 NSWLR 601

Grant v Downs (1976) 135 CLR 674

Laurenson v Wellington City Corporation [1927] NZLR 510

Mitsubishi Electric Australia Pty Ltd v Workcover Authority (Vic) (2002) 4 VR 332

New South Wales v Jackson [2007] NSWCA 279

Nickmar Pty Ltd v Preservatrice Skandia Insurance Ltd (1985) 3 NSWLR 44

Re Holloway (1887) 12 PD 167Singtel Optus Pty Ltd v Weston (2011) 81 NSWLR 526

State ofNew South Wales v Public Transport Ticketing Corporation [2011] NSWCA 60

Trade Practices Commission v Sterling (1979) 36 FLR 244

Wheeler v Le Marchant (1881) 17 Ch D 675

Texts Cited:

J.D. Heydon, Cross on Evidence, Butterworths, Sydney, 1996

Category:

Procedural rulings

Parties:

Plaintiff/Second cross-defendant: Vashisht Family Pty Ltd atf the Vashisht Family Trust

First defendant/First cross-claimant/First applicant on the Motion: ADDS (NSW) Pty Ltd

Second defendant/Second cross-claimant/Second applicant on the Motion: OM Namaha Pty Ltd

Third defendant/Third applicant on the Motion: Thirumala Associates Pty Ltd

Fourth defendant/Third cross-claimant/Fourth applicant on the Motion: Sateesh Reddy Muvva

First cross-defendant/Respondent on the Motion: Vikas Vashisht

Representation:

Counsel:
Plaintiff: H. Mann

Solicitors:
Plaintiff: S. Levitt, Levitt Robinson Solicitors
Defendant: B. Gillard, Gillard Consulting Lawyers

File Number(s):

2020/117828

Publication restriction:

No

Judgment

1. These proceedings are listed for final hearing to commence on 11 October 2021. At final hearing the parties will contest many aspects of a suite of transactions under which the defendants and their associated entities sold several rural roadside service stations and associated businesses to the plaintiffs and their associated entities. The parties engaged the same solicitor in these transactions. This has led to a pre-trial contest: the plaintiffs claim common law litigation privilege for certain communications with that solicitor and the defendants dispute the claim.

2. Ms H. Mann of counsel, instructed by S. Levitt of Levitt Robinson Solicitors, appeared for the plaintiffs at the hearing of the Motion on 12 August 2021. Mr B. Gillard, solicitor, of Gillard Consulting Lawyers appeared for the defendant.

3. The privilege issues are best understood in the context of a condensed chronology and description of the contested transactions between the parties and the issues anticipated in the forthcoming trial.

Essential Chronology of Relevant Transactions and the Issues for Trial

4. The plaintiff, Vashisht Family Pty Ltd (“Vashisht Family”) commenced these proceedings on 20 April 2020 to seek specific performance of a 20 June 2019 contract for the sale by the first defendant ADDS (NSW) Pty Ltd (“ADDS”) to Vashisht Family of certain land in Inverell, which ADDS leased out for use as a roadside service station (“the Inverell contract”). The plaintiffs contend, and the defendants dispute, that ADDS wrongfully terminated the Inverell contract.

5. Mr Vikas Vashisht controls Vashisht Family. He and his wife, Mrs Pushpita Vashisht as trustees of their family superannuation fund, the Invoke Superannuation Fund, are the second and third plaintiffs in the proceedings. The fourth defendant, Mr Sateesh Muvva, controls ADDS and the other two defendants OM Namaha Pty Ltd (“Namaha”) and Thirumala Associates Pty Ltd (“Thirumala“).

6. The plaintiffs contend that the Inverell contract resulted from negotiations during the performance of Heads of Agreement (“the Heads”) that had been made between Mr Vashisht and Mr Muvva, and possibly others, in about August 2018. Under the Heads the defendants, and entities associated with them, were to transfer to the plaintiffs, and entities associated with them, three Caltex service station stores in rural New South Wales and Queensland, namely at Warialda (NSW), North Tamborine (QLD), and Esk (QLD), together with the lands upon which these three Caltex stores operated (collectively, “the three service stations”) for a consideration of $4.5 million.

7. Between August 2018 and June 2019, the parties engaged in conduct to further the sale of the three service stations. That conduct and its characterisation are strongly disputed between the parties. That conduct included the following: the alleged part payment of the purchase price provided for under the Heads, the entry into individual contracts for the sale of the three service stations from entities controlled by the defendants to entities controlled by the plaintiffs; negotiations to meet the external mortgage liabilities to the Commonwealth Bank of Australia (“CBA”) of the entities related to the defendants that controlled the three service stations in order to facilitate their transfer; the sale by the defendants of another service station business, Caltex Ashford, to a third party as an additional part of the parties’ mutual arrangements, and Vashisht Family raising both bank and privately sourced funds to pay the consideration for the purchase of the three service stations and for assisting to meet the external liabilities of the vendor entities related to the three service stations.

8. This disputed conduct led to the parties negotiating and then entering into the Inverell contract on 20 June 2019. The plaintiffs contend that the Inverell contract was made in consideration of the completion of the sale of the three service stations. On 20 June 2019 Vashisht Family also entered a Deed of Guarantee under which each of Namaha, Thirumala and Mr Muvva guaranteed the repayment of certain deposit monies said to have been advanced under the Inverell contract, if ADDS was unable to complete the Inverell contract.

9. On 11 March 2020 ADDS purported to terminate the Inverell contract on the basis that Vashisht Family had not paid certain deposit monies due under it. But Vashisht Family contend that it had paid the deposit and that the termination of the Inverell contract was ineffective and that the purported termination by ADDS on 11 March breached the Inverell contract.

10. Vashisht Family now claims specific performance of the Inverell contract, and in the alternative, damages against ADDS and an order that ADDS and the guarantors Namaha and Thirumala repay deposit monies under the Inverell contract.

11. The defendants place quite a different construction upon the primary dealings between the parties. They deny that by the Heads ADDS acknowledged the receipt of any deposit monies and they deny that ADDS or entities associated with the defendants were paid a deposit such as that Vashisht Family claims to have recorded under the Heads.

12. The defendants accept that they received greater consideration than the $4.5 million nominated in the Heads. But they say that the extra money was received on account of arrangements made between Mr Vashisht and Mr Muvva after the execution of the Heads and that what they in fact received was insufficient to satisfy Vashisht’s full payment obligations under the Inverell contract. The defendants have cross-claimed seeking recovery of what they claim is a shortfall of $640,480.64 pursuant to a reconciliation agreement adjusting and reconciling the parties’ various offsetting obligations. The defendants claim that the reconciliation agreement was made on or about 14 February 2019 is a basis for the plaintiffs to give an account to the defendants.

13. This is a highly simplified summary of more complex factual and legal issues. But what is not in dispute is that in all these transactions the parties and their associated entities, at all relevant times after the Heads and before June 2019, retained the same solicitor, Ms Tania Kallianiotis, to undertake the necessary legal work to make and complete the sales of the three service stations, the sale of Caltex Ashford, and the Inverell contract. Ms Kallianiotis practised under the business name “A Plus Legal”.

14. Each party retaining Ms Kallianiotis, signed an acknowledgement in substantially the same form between June and September 2019, declaring that that party understood that if a conflict of interest were to arise that Ms Kallianiotis may need to cease to act for both parties, unless there was agreement for her to continue to act for one party. Although the evidence is incomplete that every party to the suite of transactions signed such an acknowledgement, there are enough such acknowledgements in substantially identical form for the Court to infer that Ms Kallianiotis arranged for them to be executed by all parties.

The Privilege Dispute

15. The defendants served on Ms Kallianiotis a subpoena which requested documents in relation to the sale of the three service stations and Caltex Ashford. In response to the subpoena Ms Kallianiotis produced documents dating between 2018 and 2020, which when copied comprise 3314 pages in 7 level arch folders. The plaintiffs were granted first access to this material.

16. The plaintiffs do not make any claim for legal professional privilege over the bulk of this material. They informally provided it to the solicitor for the defendants. The plaintiffs accept: that Ms Kallianiotis acted for both the plaintiff and the defendants in relation to the purchases of the three service stations and related transactions; and that many of the produced transaction documents and emails generated through that joint retainer are the subject of advice privilege. But they also accept that this advice privilege is held by the plaintiffs and the defendants jointly and that the plaintiffs cannot make a privilege claim over those documents against the defendants.

17. But there is a privilege dispute about 24 of the documents produced by Ms Kallianiotis. The plaintiffs contend it arises in the following way. They say that by no later than December 2019 a dispute had developed between the plaintiffs and the defendants about the various transactions on which Ms Kallianiotis was advising them.

18. The plaintiffs contend that something of a watershed in the parties’ relationships was reached as a result of Ms Kallianiotis sending an email to both parties on 20 November 2019. Her email followed a lengthy email from Mr Vashisht to Mr Muvva and Ms Kallianiotis on 15 November 2019, outlining his many disagreements with Mr Muvva.

19. Mr Vashisht’s 15 November 2019 email commenced:

“Without prejudice and after careful consideration I have obligation (sic) to make you aware of the serious situation I am in and as an effort to resolve this matter internally without the need to go to Court.”

20. The 15 November 2019 email then emphasised his pressing obligations to repay certain family-sourced private capital and his unsatisfactory dealings with Mr Muvva in seeking to have that capital returned to him so he could return it to his family. After explaining the issue, he said:

“Now I am in a serious problem due to these reasons it looks like I have no choice but to seek legal options suitable to me to come out of this situation that I have been forced into. (Tania - please also urgently send me a copy of Inverell agreement that we made)

21. The email continued, with Mr Vashisht complaining that Mr Muvva had declined to meet him and implying in various ways that are litigious dispute was in the offing. This is evident from at least the following references in the email:

“Unless you can confirm that Sateesh has made arrangements to abide by loan contract I will have no option but to seek legal options to recover the money lent to him which was due to be returned by 01/12 with interest.

…

Please be aware that since it has gone outside my control so if I get served a notice, I will have no choice but to follow the legal path as my respect, image reputation and dignity is now at stake.

I await to hear from you as a matter of urgency.”

22. The email in reply from Ms Kallianiotis on 20 November was hardly a surprise. It was formally addressed to Mr Muvva but in substance it was directed to the attention of both parties:

“Dear Sateesh,

A dispute appears to have arisen between the purchaser and yourself.

As I am acting for both sides, I am limited in what I can do.

In the circumstances, I would strongly recommend that both you and the purchaser obtain your own independent legal representative as I cannot act where a conflict of interest arises.

Kind regards,

Tania Kallianiotis”

23. The 24 documents in dispute are all emails sent between 4 December 2019 and 5 June 2020: (1) between the plaintiffs and Ms Kallianiotis; (2) between the current solicitors acting for the plaintiffs in these proceeding, Levitt Robinson, and Ms Kallianiotis; and (3) between Ms Kallianiotis and her staff in relation to (2). They are conveniently and accurately summarised in the plaintiffs “Privilege Claims Schedule”, which is Annexure B to Ms Mann’s written submissions on behalf of the plaintiffs dated 10 August 2021 (“the Schedule”).

24. The plaintiffs claim privilege in relation to these 24 emails on the basis that these communications were made for the dominant purpose of the plaintiff being provided with professional legal services relating to this litigation, first anticipated and then existing after the commencement of these proceedings on 20 April 2020. This claim is not founded on advice privilege but rather on litigation privilege. All but two of the 24 emails postdate 20 April 2020.

25. The defendants’ submissions raise three questions: (1) what law applies to this claim of privilege, the common law or the Evidence Act 1995; (2) on the basis of the applicable law, do the 24 emails attract litigation privilege, either at common law or under the statutory equivalent of litigation privilege, Evidence Act, s 119; and (3) if litigation privilege is attracted is it answered by the plaintiffs and the defendants jointly retaining Ms Kallianiotis.

(1) Is the Privilege Claim Determined under Common Law or the Evidence Act?

26. Ms Mann on behalf of the plaintiffs contends that this dispute is governed by the common law, and not by the provisions of the Evidence Act, because the documents in question were produced by a person other than the person claiming privilege, the defendants: CDPP v Kinghorn (2020) 102 NSWLR 72; (2020) 379 ALR 345; [2020] NSWCCA 48 at [34]-[36] (“Kinghorn”).

27. Ms Mann’s submission should be accepted. Kinghorn, a decision of the Court of Criminal Appeal, confirms well-established authority in both criminal and civil cases, commencing with Carbotech-Australia Pty Ltd v Yates [2008] NSWSC 1151 (“Carbotech”). In Carbotech, Brereton J held that whilst Uniform Civil Procedure Rules2005 (“UCPR”) r 1.9 had the result that the Evidence Act applied to the initial stage of production of documents to the Court under subpoena, neither the Evidence Act nor the UCPR applied at the subsequent stage of inspection of documents. Evidence Act, s 131A was subsequently amended to modify this position and to extend the scope of operation of the Evidence Act to the time of inspection of the documents.

28. After some initial judicial hesitation, explained by White J (as his Honour then was) in Singtel Optus Pty Ltd v Weston (2011) 81 NSWLR 526; [2011] NSWSC 1083 at [24] – [28] (“Singtel”), the position was accepted that the amended s 131A should be interpreted as commanding that where the objection to inspection is taken by the person required to produce the document on subpoena or notice to produce, the Evidence Act, and not the common law, applies.

29. But that extension of the operation of the Evidence Act was limited by the terms of s 131A itself. Allsop P (as his Honour then was) held in State ofNew South Wales v Public Transport Ticketing Corporation [2011] NSWCA 60 at [32] (“Public Transport Ticketing”) that the section only applies where the person objecting to disclosure on the ground of privilege is the same person who was required to produce the document. The section does not apply when a claim for privilege is made by persons other than the person required to produce the documents. In such cases the common law applies. Kinghorn affirmed Singtel and reached the same result as Public Transport Ticketing.

30. The solicitor, Ms Kallianiotis, produced the documents under subpoena. It is the plaintiffs, not Ms Kallianiotis, who claim the privilege. Kinghorn applies. On behalf of the defendants Mr Gillard contests this conclusion, submitting generally that the Evidence Act applies. But his submissions did not demonstrate how the Court should distinguish Kinghorn, Singtel and Public Transport Ticketing in this case.

31. This dispute is therefore governed by the common law. It is to be observed that the common law test for attracting legal professional privilege to communications was stated in Grant v Downs, as being a privilege confined to documents which are brought into existence for the sole purpose of their being submitted to legal advisors for advice or for use in legal proceedings and a document which would in any event have been brought into existence for another purpose is not privileged from production. When the Evidence Act was enacted the common law sole purpose test was replaced in Evidence Act ss 118 and 119 by a dominant purpose test. Thus, a determination that the common law applies to the question before the Court, brings with it an application of the sole purpose test. But as will be seen in this case the same result would flow from the application of both tests.

(2) Do the 24 Emails Attract Litigation Privilege at Common Law?

32. The plaintiffs claim that legal professional privilege at common law is attracted by the circumstances of the sending of the 24 emails. The claim is grounded upon the extended aspect of the common law privilege that relates to communications where a party is engaged in, or anticipates being engaged in, litigation and that party, or that party’s solicitor, communicates with a third person for the purposes of the litigation. The claim here does not engage the simpler case of communications between a party and that party’s own solicitor for the purposes of existing or anticipated litigation.

33. After Grant v Downes and before the enactment of the Evidence Act the common law principles defining litigation privilege as it applied to communications with third parties was concisely summarised by Lockhart J in Trade Practices Commission v Sterling (1979) 36 FLR 244; (1979) ATPR 40-121 at 246 (“Sterling”). In Sterling Lockhart J set to rest a debate that had been generated after Grant v Downes that third-party communications in, or anticipation of, litigation were no longer to be protected by legal professional privilege. Lockhart J made clear that Grant v Downes did not have this effect and affirmed the law as it had been stated in longstanding authority on the subject such as Wheeler v Le Marchant (1881) 17 Ch D 675 and In Re Holloway (1887) 12 PD 167.

34. Common law litigation privilege relevantly covers, as Lockhart J described, at least two classes of communication. The first class is between a litigating party’s solicitor and a third person:

“Communications and documents passing between the party's solicitor and a third party if they are made or prepared when litigation is anticipated or commenced, for the purposes of the litigation, with a view to obtaining advice as to it or evidence to be used in it or information which may result in the obtaining of such evidence”.

35. The second is between a litigating party and a third person:

“Communications passing between the party and a third person (who is not the agent of the solicitor to receive the communication from the party) if they are made with reference to litigation either anticipated or commenced, and at the request or suggestion of the party's solicitor; or, even without any such request or suggestion, they are made for the purpose of being put before the solicitor with the object of obtaining his advice or enabling him to prosecute or defend an action”.

36. The plaintiffs engaged their present solicitors, Levitt Robinson, no later than the commencement of these proceedings on 20 April 2020. Of the 24 emails over which the plaintiffs claim litigation privilege:

1. nine were sent between Mr Vashisht and Ms Kallianiotis, two of these on 4 December 2019 before this litigation commenced and seven after 20 April 2020; and

2. 15 were sent between Levitt Robinson and Ms Kallianiotis and all of these were after 20 April 2020.

37. The plaintiffs make clear for the purposes of their analysis that Ms Kallianiotis is a “third person”, to use Lockhart J’s language, not their own legal advisor.

38. The plaintiffs contend that all nine Levitt Robinson/Kallianiotis emails fall within the first class described by Lockhart J. The plaintiffs’ privilege claim to this class is abbreviated in the plaintiffs’ submissions as being on “the Levitt Robinson basis”. The plaintiffs further contend that the two Vashisht/Kallianiotis emails of 4 December 2019 and the seven other Vashisht/Kallianiotis emails after 20 April 2020 fall within the second class described by Lockhart J. The plaintiffs’ privilege claim to this class is abbreviated as being on “the Vashisht basis”.

39. The parties agreed that the Court could inspect the 24 documents in question to determine the question of privilege, as Grant v Downs permits: (1976) 135 CLR 674, at 689; (1976) 11 ALR 577; (1976) 51 ALJR 198, at 689 (per Stephen, Mason and Murphy JJ).

40. The Claim on the Levitt Robinson Basis. Upon inspection all 15 emails for which litigation privilege is claimed on the Levitt Robinson basis are, as claimed, communications between Levitt Robinson and Ms Kallianiotis that were sent after the commencement of the present litigation. The plaintiffs have a strong claim to litigation privilege over these documents. Scrutinising their subject matter, on their face they all answer the description, to use Lockhart J’s words in Sterling, of being communications “with a view to obtaining… evidence to be used in [the litigation] or information which may result in the obtaining of such evidence”. As might be expected from these emails postdating the commencement of the present litigation, they are all communications drawing heavily upon the context of the present proceedings and have the obvious purpose of seeking to furnish evidence for them.

41. As the plaintiffs’ Privilege Claims Schedule makes clear in its descriptions, many of the communications from Levitt Robinson are obtaining documents for use in the litigation and for similar purposes such that it can readily be inferred that the communications would not have taken place without the present litigation. Thus, the plaintiffs claim to these documents satisfies both the sole purpose and the dominant purpose test.

42. The Claim on the Vashisht Basis. The emails the subject of the plaintiffs’ privilege claims on the Vashisht basis may be divided into two groups. The first group of emails are the seven emails sent after 20 April 2020. These emails are very similar in character to the emails for which privilege is claimed on the Levitt Robinson basis. They are all draw heavily upon the context of the present proceedings and have the obvious sole purpose of seeking to furnish evidence for them.

43. The Vashisht basis claim over the second group of two emails sent on 4 December 2019 raises an additional question: whether on the available materials the Court can infer that the communication as early as 4 December 2019 was in anticipation of the present litigation. Although Lockhart J’s formulation of the test in Sterling used the expression “anticipated” in relation to future litigation and that expression later found its way into Evidence Act s 119, a fuller description of the test at common law is that the litigation must either be in existence, or be “reasonably contemplated” and there must not merely some vague apprehension of litigation generally: Laurenson v Wellington City Corporation [1927] NZLR 510 at 511. At common law the question of whether litigation was contemplated at the relevant time is one of fact to be determined upon an objective standard: Nickmar Pty Ltd v Preservatrice Skandia Insurance Ltd (1985) 3 NSWLR 44; (1985) 3 ANZ Ins Cas 60-657.

44. Satisfying the requirement of “anticipated” litigation under the Evidence Act is in substance little different. Proceedings are “anticipated” where there is a real prospect of them (as distinct from a mere possibility) but such prospect does not have to be more likely than not: Mitsubishi Electric Australia Pty Ltd v Workcover Authority (Vic) (2002) 4 VR 332; [2002] VSCA 59 at 341 [19] per Batt JA; adopted in New South Wales v Jackson [2007] NSWCA 279, Giles JA (Mason P and Beazley JA agreeing) at [67].

45. The Court’s inspection here of the two emails the subject of the Vashisht basis claim reveals that they are in fact identical. They are two copies of one email dated 4 December 2019. Analysis can proceed by looking at the email itself and the surrounding circumstances.

46. The email on its face does not expressly refer to anticipated litigation on behalf of Vashisht Family such as the present action for specific performance of the Inverell contract but without revealing the text of the email it can safely be said that its subject matter does have a clear connection with the subject matter of such litigation. The 4 December email is quite consistent with an inference that its purpose was to further the performance of the Inverell contract with the assistance of Ms Kallianiotis without further litigation.

47. The surrounding circumstances point towards the purpose of the 4 December email being to further litigation which Mr Vashisht had in reasonable contemplation at that time. Although the theme of Mr Vashisht’s 15 November 2019 email to Ms Kallianiotis and Mr Muvva is the avoidance of litigation, the path of litigation is clearly laid out as an available option. Ms Kallianiotis interpreted the 15 November email the same way. By 20 November she had reached the view that a conflict of interest had arisen between her clients.

48. The pleadings do not contest that emails were sent between a separate set of solicitors, Indus Lawyers on behalf of the plaintiffs and Ms Kallianiotis on 10 and 17 December about what became the subject matter of the present litigation. The close proximity of this correspondence with the 4 December emails further confirms what was in contemplation as at 4 December.

49. It is true that ADDS only purported three months later, on 11 March 2020 to terminate the Inverell contract on the basis that Vashisht Family had not paid deposit monies, thereby triggering Vashisht Family to launch this litigation. But that outcome was in reasonable contemplation by early December 2019.

50. Prima facie all 24 emails therefore attract litigation privilege at common law. But the defendants contended that this conclusion was answered by the fact that the plaintiffs and the defendants had jointly retained Ms Kallianiotis, which leads to the third question.

(3) Does the Joint Retainer Answer the Plaintiffs’ Claim for Litigation Privilege?

51. The defendants first sought to rely upon Evidence Act, s 124 to say that the litigation privilege upon which the plaintiffs rely is in substance the privilege provided for under Evidence Act, s 119, and that that privilege is not available here by reason of s 124. Evidence Act, s 124 provides an exception to the application of s 119 in “a civil proceeding” where two parties “before the commencement of the proceedings” jointly retained a lawyer “in relation to the same matter”. The parties debated the scope and meaning of word “matter” in the section. But the Court does not have to decide upon the proper construction of s 124 in this case. The Evidence Act does not apply here.

52. The defendants reframed their argument, claiming that they were entitled to access to the documents at common law. The basis of the argument was that the present circumstances should be characterised as a situation of joint privilege. They submitted that here the plaintiffs and the defendants had joined in communicating with Ms Kallianiotis for the purpose of retaining her services, or obtaining her advice, in relation to the suite of conveyancing transactions in which they had been engaged. In those circumstances, the nature of the privilege which arises is explained in Farrow Mortgage Services Pty Ltd (In Liq) v Webb (1996) 39 NSWLR 601; (1996) 132 FLR 466; (1996) 14 ACLC 1240 (“Farrow”). Sheller JA (at 608A – C) in Farrow explained the applicable principle in such circumstances.

“Two or more persons may join in communicating with a legal adviser for the purpose of retaining his or her services or obtaining his or her advice. The privilege which protects these communications from disclosure belongs to all the persons who joined in seeking the service or obtaining the advice. The privilege is a joint privilege. So is it also if one of a group of persons in a formal legal relationship communicates with a legal advisor about a matter in which the members of the group share an interest. Communications by one partner about the affairs of the partnership or a trustee about the affairs of the trust are examples. Implicit in the relationship is the duty or obligation to disclose to other parties thereto the content of the communication. Accordingly, no privilege attaches to such communications as against the others who, with the client, share an interest in the subject matter of communications. But the parties are together entitled to maintain the privilege ‘against the rest of the world’”.

53. Mr Gillard, on behalf of the defendants, points to the fact that the description in the Privilege Claims Schedule of the communications shows that Ms Kallianiotis often appears to be producing documents in her possession to the plaintiffs, or to the solicitors for the plaintiffs. He argues that the 4 December emails and indeed the later emails substantially involve Ms Kallianiotis, producing to the plaintiffs documents that by reason of the original joint instructions to Ms Kallianiotis on the suite of transactions are documents that belong jointly to both the plaintiffs and the defendants. He says that the plaintiffs cannot maintain a privilege in such communications against the defendants. He says that all Ms Kallianiotis’ knowledge is joint knowledge from the original joint retainer and all the documents she holds are documents in which both parties have a joint interest.

54. But in the Court’s view Ms Mann’s answer to this argument is persuasive. She says the defendants do not contest that the documents on Ms Kallianiotis’ files from when she was progressing the suite of transactions between the parties are the subject of joint advice privilege. She concedes that because of the joint privilege the plaintiffs could not oppose the defendants having access to any of those documents. And consistent with this submission the plaintiffs take the position that the defendants are entitled to have access to everything on Ms Kallianiotis’ files.

55. But the limited nature of the defendants’ claim here is in the particular communications with Ms Kallianiotis from 4 December 2019, which the plaintiffs submit are covered by litigation privilege. Whilst the original documents on Ms Kallianiotis’ files remain jointly accessible without restriction between these parties, the requests for those documents for anticipated or actual litigation, go beyond the original joint advice privilege and are covered by the litigation privilege which is attracted to the communications requesting the documents.

56. The 15 November and 20 November 2019 correspondence between Ms Kallianiotis and the parties reinforce the inference that the contested communications here are not in furtherance of the original joint retainer. Rather the communications satisfy the sole purpose test of being in pursuance of the litigation. The joint advice privilege with Ms Kallianiotis is not engaged. Or to put it in the terms used by Sheller JA in Farrow, it cannot be said with respect to these communications, that “[i]mplicit in the relationship is the duty or obligation to disclose to other parties thereto the content of the communication.”

57. No such implication arises here because these communications were to advance litigation launched or to be launched by Levitt Robinson on behalf of the plaintiffs against the defendants.

58. The original joint retainer of Ms Kallianiotis does not displace the Court’s conclusion that all 24 emails attract litigation privilege at common law and need not be disclosed by the plaintiffs to the defendants.

Conclusions and Orders

59. The plaintiffs have been successful. Cost should therefore follow the event.

60. For these reasons the Court makes the following orders:

1. Order that documents numbered 1 to 24 in the plaintiffs Privilege Claims Schedule, being Annexure B to the plaintiffs written submissions dated 10 August 2021 are not open to inspection by the defendants and shall be kept in the subpoena packet and marked “confidential, not to be opened except on the order of a judge”; and

2. Order that the defendant pay the plaintiff’s cost of this application.

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Decision last updated: 17 September 2021