Vella v Organic Fertilisers (Leppington) Pty Limited

[2020] NSWSC 669

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Vella v Organic Fertilisers (Leppington) Pty Limited [2020] NSWSC 669

Hearing dates:

21 May 2020

Date of orders:

21 May 2020

Decision date:

29 May 2020

Jurisdiction:

Common Law

Before:

Lonergan J

Decision:

(1) I grant access to the parties to the material produced by Brydens solicitors on 18 May 2020.

 

(2) I set aside paragraphs 2(b), (c), (f) and (g) of the subpoena to produce documents directed to Brydens Lawyers Pty Limited.

 

(3) Documents in response to paragraph 3(a) of that subpoena are to be produced to Court by 3:00pm on Friday 22 May 2020.

 (4) Each party is to pay its own costs of the notice of motion filed on 29 April 2020

Catchwords:

CIVIL PROCEDURE — subpoenas — application to set aside — abuse of process — plaintiff claims subpoena is oppressive and non-specific — whether there is a legitimate forensic purpose
CIVIL PROCEDURE — subpoenas — to produce documents — objection to production of documents — client legal privilege — question of waiver

Legislation Cited:

Civil Procedure Act 2005 (NSW)
Evidence Act 1995 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)
Workers Compensation Act 1987 (NSW)

Cases Cited:

Fenwick v Wambo Coal Pty Ltd (No 2) [2011] NSWSC 353

Category:

Procedural and other rulings

Parties:

Peter Vella (Plaintiff)
Organic Fertilisers (Leppington) Pty Limited (Defendant)

Representation:

Counsel:
M Campbell (Plaintiff)
L Robison (Defendant)

  Solicitors:
Brydens Lawyers (Plaintiff)
Holman Webb (Defendant)

File Number(s):

2018/242412

Publication restriction:

Nil

Judgment

1. The plaintiff, Peter Vella, sued his employer, Organic Fertilisers (Leppington) Pty Limited (“Organic”) claiming damages for injuries sustained due to an unsafe system of work spanning the period 2011 to 2014. During that period he worked at a pelletised chicken fertiliser manufacturing business at Bringelly which he says was operated by Dino-Fert Fertilisers Pty Limited (“Dino-Fert”).

2. He requires leave under s 151D of the Workers Compensation Act 1987 (NSW) to pursue the proceedings as they were commenced in August 2018, more than 3 years after his injury was sustained.

3. The proceedings are listed for hearing before me to commence on 1 June 2020, with a 5 day estimate.

4. An issue has arisen regarding a subpoena issued by Organic directed to Mr Vella’s solicitors, Brydens Lawyers Pty Limited (“Brydens”), returnable on 18 May 2020.

5. Brydens says that the subpoena is oppressive, non-specific and seeks documents protected by legal professional privilege in circumstances where that privilege has not been waived.

6. Organic says that there is legitimate forensic purpose in seeking the material. A combination of the affidavit material filed in the proceedings, the nature of the proceedings and the interface with other proceedings, as well as the relief sought by Mr Vella by way of extension of time under 151D amount to waiver of that privilege under s 122 of the Evidence Act 1995 (NSW).

7. I decided that the issue should be dealt with prior to the hearing.

8. There was some negotiation regarding parts of the subpoena. Five sub-paragraphs remained in issue as follows:

“2.   In relation to your client Peter Vella (Date of birth 28 June 1978):

2(b) All file notes in relation to conferences held with Peter Vella

2(c) All legal advices provided by Brydens to Peter Vella

2(f) All written legal advices provided by barristers in relation to Peter Vella’s legal proceedings against the Defendant and Dino-Fert Fertiliser Pty Limited

2(g) All written instructions pertaining to Peter Vella’s legal proceedings against the Defendant and Dino-Fert Fertiliser Pty Limited

3.   In relation to Supreme Court proceedings 2018/00049935, Peter Vella v Dino-Fert Fertilisers Pty Limited (the Proceedings)

3(a) All written instructions from Peter Vella in relation to the settlement of the Proceedings.

9. After hearing argument I made orders that paragraphs 2(b), (c), (f) and (g) of the subpoena filed on 29 April 2020 be set aside, and that documents responsive to paragraph 3(a) should be produced by 5:00pm 22 May 2020 on the basis that privilege over any responsive material had been waived.

10. These are my reasons for making those orders.

Background

11. Mr Vella commenced these proceedings in August 2018. In its Defence, Organic pleaded that the action is statute-barred. Mr Vella filed a notice of motion seeking leave to proceed out of time pursuant to s 151D of the Workers Compensation Act and for that application to be heard and determined at the same time as all other issues.

12. Organic opposes leave and disputes it was negligent as alleged or at all. Contributory negligence is also alleged.

13. Mr Vella commenced other proceedings about the same injuries in February 2018, initially in the District Court, against Dino-Fert (“the Dino-Fert proceedings”). He asserted that Dino-Fert occupied the premises where the work in issue was carried out, that Dino-Fert “operated” the chicken fertiliser manufacturing business and that although he was employed by Organic, he was “placed with Dino-Fert as the workshop manager/labourer” and was injured in “the course of his work with the defendant”.

14. The nature and content of the duty of care Mr Vella alleges Dino-Fert owed to him in these circumstances is not stated, so the basis upon which he puts his case against Dino-Fert is somewhat opaque to analysis.

15. The Dino-Fert proceedings were transferred to the Supreme Court and joined with the case Mr Vella had filed against Organic. They were case managed as one by the Registrar during 2018 and 2019. On 21 June 2019 both proceedings were set down for hearing as one trial commencing 1 June 2020.

16. On 6 December 2019 the Registrar made orders in both proceedings preparing the matters for hearing including requiring the parties to participate in a further mediation by 28 February 2020.

17. A mediation took place on 20 March 2020. Terms of settlement were signed between Mr Vella and Dino-Fert in the Dino-Fert proceedings on the basis of a verdict in favour of Dino-Fert, with Dino-Fert to pay Mr Vella’s costs as agreed or assessed. Organic’s solicitors were not informed of this settlement until 25 March 2020 when the solicitor for Organic, Mr Brawn, telephoned Ms Lieu, solicitor for Dino-Fert, and directly enquired. The evidence suggests that Ms Lieu gave partial answers to questions raised by Mr Brawn and refused to provide Mr Brawn with a copy of the terms of settlement. The terms of settlement were not provided to Mr Brawn until 1 April 2020 and were provided by Brydens.

18. The terms of settlement had by then already been filed with the Court on 20 March 2020 and the orders entered on 24 March 2020, without any reference to Organic.

19. In the usual course, if Mr Vella had sued both Dino-Fert and Organic as defendants in one proceeding, the terms of settlement would not be able to be filed and orders entered unless Organic consented to the orders sought.

20. There is some significance for Organic in the approach taken by the legal representatives of Mr Vella and Dino-Fert because Organic has a live cross-claim against Dino-Fert, which is potentially defeated by the entry of the verdict in favour of Dino-Fert in the Dino-Fert proceedings.

21. Dino-Fert acted on this position by filing a notice of motion on 29 April 2020 seeking dismissal of Organic’s cross-claim against it on the basis of the judgment entered in its favour in the Dino-Fert proceedings. This notice of motion has not yet been heard, although affidavits in respect of it have been filed and served. Some of that affidavit material was deployed in the argument on this notice of motion.

Evidence

22. In support of its application two affidavits of the solicitor for Mr Vella - Wesley Ranson - affirmed 8 April 2020 and 19 May 2020, were read. The latter affidavit simply exhibited the documents responsive to the non-contentious parts of the subpoena. The earlier affidavit traced through in detail the action taken by Brydens since their retainer on 3 February 2015 to prosecute Mr Vella’s rights regarding his work injury claim and annexed various advices and documents authored by Brydens. Also read was an affidavit of Mr Vella dated 12 March 2020 which annexed his two evidentiary statements dated December 2018 and May 2019 which outlined in some little detail his understanding – and perhaps – on occasion misunderstanding or lack of full understanding of advice given to him prior to the filing of the statement of claim in August 2018.

23. The defendant relied upon an affidavit of Mr Brawn, solicitor, dated 12 May 2020 and an affidavit of Ms Lieu, solicitor for Dino-Fert dated 29 April 2020. This material deals with the circumstances surrounding settlement of the Dino-Fert proceedings on 20 March 2020 and the judgment being entered without reference to Organic on 24 March 2020.

24. The deponents were not required for cross-examination. Written submissions were filed and oral submissions were made.

Submissions

25. As submitted by Ms Campbell, counsel for Mr Vella, r 33.4 of the Uniform Civil Procedure Rules 2005 (NSW) provides that the Court may on application of a party or a person with sufficient interest, set aside a subpoena in whole or in part.

26. Ms Campbell submitted that the sub-paragraphs 2(b), (c), (f) and (g) of the subpoena are first, oppressive and fishing, second, sought documents that were potentially not relevant but due to the impermissible generality of the description, this was difficult to assess. Third, (and this applies to the document(s) described in subparagraph 3(a)) all documents caught by the description were confidential documents protected by legal professional privilege and fourth, there had been no waiver of privilege: s 122(3) of the Evidence Act and Fenwick v Wambo Coad Pty Ltd (No 2) [2011] NSWSC 353.

27. Counsel for the defendant, Mr Robison, submitted that Organic’s forensic purpose in pressing subparagraphs 2(b), (c), (f) and (g) was an entitlement to obtain, examine and test material underpinning the bases claimed for relief under s 151D of the Workers Compensation Act and that privilege over that material had been waived by the reliance upon the affidavit material filed and served in support of Mr Vella’s s 151D application.

28. In relation to sub-paragraph 3(a), Mr Robison asserted an entitlement to examine and test the nature of the payment to be made by Dino-Fert to Mr Vella in the proceedings settled in March 2020. He argued that this issue was now “on the cards” because the plaintiff effectively asserted the settlement involved a verdict in favour of the defendant Dino-Fert with no financial payment to Mr Vella. The result of this asserted position, and the entering of this judgment without reference to Organic, was to disentitle Organic from pursuing its cross-claim against Dino-Fert and its legislative entitlement to s 151Z[1] recovery from Dino-Fert as a tortfeasor. Mr Robison argued that this positive assertion effectively waived legal professional privilege over documents (that would normally be subject to that privilege) that showed the nature and basis of the settlement. Brydens informed the solicitor for Organic that a payment of $125,000 by Dino-Fert to the solicitor for Mr Vella was part of the settlement and that it was costs only. This was now an issue “on the cards” between the parties. It would be unfair if Organic was not permitted to test the assertions made manifest by this settlement arrangement.

    1. Workers Compensation Act 1987 (NSW)

29. In response, Ms Campbell argued in relation to sub-paragraph 3(a), that privilege had not been waived over the material and the court should not allow the undermining of a solicitor’s word as to the nature of the payment to be made for costs. Mr Robison responded that he was not seeking to impugn the credibility of Mr Ranson’s account of the arrangement. Organic was still entitled to examine the relevant material to determine whether submissions were available to Organic to keep alive some or all of its cross-claim potential against Dino-Fert.

Decision

30. Legal professional privilege and its waiver is covered by Part 3.10 Division 1 of the Evidence Act. The relevant provisions that underpin the parameters of the arguments raised by the parties are as follows:

118   Legal advice

Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of—

(a)  a confidential communication made between the client and a lawyer, or

(b)  a confidential communication made between 2 or more lawyers acting for the client, or

(c)  the contents of a confidential document (whether delivered or not) prepared by the client, lawyer or another person,

for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client.

119   Litigation

Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of—

(a)  a confidential communication between the client and another person, or between a lawyer acting for the client and another person, that was made, or

(b)  the contents of a confidential document (whether delivered or not) that was prepared,

for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding (including the proceeding before the court), or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party.

122   Loss of client legal privilege: consent and related matters

(1)  This Division does not prevent the adducing of evidence given with the consent of the client or party concerned.

(2)  Subject to subsection (5), this Division does not prevent the adducing of evidence if the client or party concerned has acted in a way that is inconsistent with the client or party objecting to the adducing of the evidence because it would result in a disclosure of a kind referred to in section 118, 119 or 120.

(3)  Without limiting subsection (2), a client or party is taken to have so acted if—

(a)  the client or party knowingly and voluntarily disclosed the substance of the evidence to another person, or

(b)  the substance of the evidence has been disclosed with the express or implied consent of the client or party.

(4)  The reference in subsection (3) (a) to a knowing and voluntary disclosure does not include a reference to a disclosure by a person who was, at the time of the disclosure, an employee or agent of the client or party, or of a lawyer of the client or party, unless the employee or agent was authorised by the client, party or lawyer to make the disclosure.

…

31. It is overwhelmingly likely that all of the material sought in sub-paragraphs 2(b), (c), (f) and (g) would be protected by legal professional privilege. However, in my view the debate does not get that far because the sub-paragraphs themselves are too wide and are not appropriately confined in time to correspond to the forensic purpose asserted.

32. I accept the submission of Ms Campbell that this impermissible width means that potentially advices and documents prepared that have nothing whatsoever to do with the s 151D extension of time sought would be included.

33. 33   I accept that the parties had some exchanges to narrow the areas for dispute prior to the argument before me but the defendant still pressed those sub-paragraphs. In addition to refraining from narrowing the compass to pre-August 2018, Mr Robison argued that privilege had been lost over that material by vague references in the affidavits to Mr Vella’s understanding of advice he had been given and dates when certain things occurred such as conferences with counsel.

34. Sub-paragraphs 2(b), (c), (f) and (g) are too wide and go far beyond any legitimate forensic purpose corresponding to s 151D issues. I set those sub-paragraphs aside as oppressive.

35. As a fall-back position Mr Robison submitted that it would be consistent with s 56 of the Civil Procedure Act 2005 (NSW) and a “just quick and cheap” outcome, for the Court to engage in a type of consultative re-drafting of sub-paragraphs 2(b), (c), (f) and (g) to narrow the parameters of the documents his client seeks.

36. I do not accept that such an approach is appropriate. Discussions between the parties in response to the plaintiff’s written submissions could have and should have occurred prior to this hearing. I am now required to determine the arguments on their merits; not to engage in a redrafting exercise.

37. Sub-paragraph 3(a) however does not suffer from the same problems. It is directed to the very specific matters raised by Mr Robison and is drafted in a very confined way to likely identify only one or very few documents that would shed light directly on the question in issue. The forensic purpose is confined and clear.

38. I accept Mr Robison’s submissions set out in [28] and [29] of this judgment as to the relevance of the material to that issue. I also agree with the submissions that privilege has been lost pursuant to ss 122(2) and (3) of the Evidence Act. Accordingly I order that the document(s) responsive must be produced to the Court by 3:00pm on 22 May 2020.

Costs

39. Both parties have had partial success with their arguments. In the circumstances the appropriate costs order is each party to bear his and its own costs of the notice of motion and I add that order to the orders made on 21 May 2020.

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Endnote

Amendments

09 June 2020 - Amendment within paragraph 9 due to typographical error

Decision last updated: 09 June 2020