Vic Kids Property Pty Ltd v Kritsonis - [2018] VCC 891

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

COMMERCIAL DIVISION
Revised
Not Restricted
Suitable for Publication
GENERAL LIST
Case No. CI-17-03573

Vic Kids Property Pty Ltd (ACN 144 889 305) ATF Vic Kids Property Trust Plaintiff

V

Ionna Kritsonis & Anor Defendants
---

JUDGE:

Judicial Registrar Burchell

WHERE HELD:

Melbourne

DATE OF HEARING:

13 June 2018

DATE OF DECISION:

20 June 2018

CASE MAY BE CITED AS:

Vic Kids Property Pty Ltd v Kritsonis & Anor

MEDIUM NEUTRAL CITATION:

[2018] VCC 891

REASONS FOR DECISION
---
Subject:Client Privilege – whether chain of emails confidential communication – legal advice - whether waiver for failing to object to production under subpoena – whether the court ought to inspect documents in the absence of admissible evidence in support of claim of privilege.
Legislation Cited: sections 118 and 122 of the Evidence Act 2008 (Vic); Order 29.13 of the County Court Civil Procedure Rules 2008.
Cases Cited:Apple v Wily [2002] NSWSC 855; Asahi Holdings (Australia) Pty Ltd v Pacific Equity Partners (No 4) [2014] FCA 796; AWB v Cole (No 5) [2006] FCA 1234; Balabel v Air India [1988] Ch 317; Barnes v Commissioner of Taxation (2007) FCAFC 88; Carbo-Tech Australia Pty Ltd v Yates [2008] NSWSC 1151; Carter Holt Harvey Wood Products Australia Pty Ltd v Auspine Ltd [2008] VSCA 59 at [3]; Conlon v Conlons Ltd [1952] 2 All ER 462; Divall v Mifsud [2005] NSWCA 447; DSE (Holdings) Pty Ltd v InterTAN Inc (2003) 135 FCR 151; Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49; Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404; Grant v Downes (1976) 135 CLR 674; Hancock v Rinehart (Privilege) [2016] NSWSC 12; Hastie Group Ltd (in liq) v Moore [2016] NSWCA 305; Mann v Carnell (1999) 201 CLR 1; Hodgson v Amcor Ltd (2011) 32 VR 568; INSTIL Group Inc v Zahoor [2003] 2 ALLER 252; Matthews v SPI Electricity Pty Ltd & Ors (No 6) [2013] VSC 422; McKenzie v Cash Converters International Ltd [2017] FCA 1564; Minter v Priest [1930] AC 558; National Crime Authority v S (1991) 29 FCR 203; Osland v Secretary, Department of Justice (2008) 234 CLR 275; Pratt Holdings Pty Ltd v Commissioner of Taxation (2004) 136 FCR 357; QUBE Logistics (Vic) Pty Ltd v Wimmera Container Line Pty Ltd [2013] VSC 695; R v Braham [1976] VR 547; Sommerville v Australian Securities Commission (1995) 131 ALR 517; Spedley Securities Ltd (in liq) v Bank of New Zealand (1991) 26 NSWLR 711; Telstra Corp v Australis Media Holdings (1997) 41 NSWLR 147 at 149; Viterra Malt Pty Ltd v Cargill Australia Ltd [2018] VSCA 118; Wheeler v Le Marchant (1881) 17 Ch D 675.

---

APPEARANCES:
Counsel Solicitors

For the Plaintiff J D Catlin Evans Ellis Lawyers

For the Defendant P Little Billings Cloak
JUDICIAL REGISTRAR:
Introduction

By email dated 10 April 2018, the defendants made an application seeking release of the documents over which the plaintiff claimed privilege. The issues before me are:
(a) Has the plaintiff’s claim for privilege been established? (section 118 of the Evidence Act 2008 (Vic) (“the Act”)); and
(b) If so, has the privilege been waived? (section 122 of the Act)
Background Facts
On 7 December 2016, the defendants were the successful bidders at an auction for 2 adjacent parcels of land in Rosebud. A childcare centre business operated from one of the pieces of land. The business licensed the next door property from VicRoads to use as its playground for the centre. Special Condition 31 of the Contract of Sale provided that the vendor would, subject to VicRoads’ consent, assign to the purchaser the licence agreement that existed in respect of the playground.
The defendants claim that it was subsequently discovered that there was no licence agreement to assign. They refused to pay the deposits in the sum of $160,000.00 and $40,000.00 respectively on the basis of misleading and deceptive conduct and common law fraudulent misrepresentation. On 21 February 2017, the plaintiff issued Notices of Default and Rescission and terminated the contracts. The defendants claim that the plaintiff wrongfully terminated the contracts.
Procedural History
The matter was first listed before me on 4 May 2018 following receipt of an email from the defendants’ solicitors requesting a directions hearing on 10 April 2018. The application to challenge the plaintiff’s claim of privilege was supported by an affidavit sworn by the defendants’ solicitor on 26 April 2018 deposing to the inspection of subpoenaed documents received from VicRoads on 23 March 2018. Various emails between representatives of VicRoads and a director of the plaintiff in relation to the existence or otherwise of a licence agreement had been produced by VicRoads but had not been produced by the plaintiff. There was a question as to whether these documents were listed in Part 2 of the plaintiff’s affidavit of documents over which privilege was claimed.
By affidavit sworn 3 May 2018, the defendants’ solicitor further deposed to attending the Registry on 23 March 2018 to inspect documents produced pursuant to subpoena by Burgess Rawson & Associates (Burgess Rawson). A number of emails between various people including Burgess Rawson, a director of the plaintiff, Adam Zuchowski of Evans Ellis Lawyers were inspected but had not been produced by the plaintiff. There was a question as to whether these documents were listed in Part 2 of the plaintiff’s affidavit of documents over which privilege was claimed.
The hearing was adjourned to 13 June 2018 so that the plaintiff could provide a third further affidavit of documents to enable the plaintiff to properly state the grounds of privilege, verify and provide proper particulars of its claims and to produce documents then numbered 43, 44, 45, 70 and 75 which the plaintiff conceded in oral submissions were not privileged and should be removed from Part 2.
The third further affidavit of documents discovered 14 new documents; listed 19 documents in Part 2 claiming legal advice privilege and moved documents numbered 74 and 81 in old Part 2 to Schedule 1.
By letter dated 1 June 2018, the defendants’ solicitor maintained their challenge to the plaintiff’s claim of privilege noting that:
(a) Three of the documents in Part 2 had already been produced pursuant to subpoena and any privilege had been impliedly waived (Exhibit “CWP-3” documents);
(b) The plaintiff had failed to provide a sufficient explanation of what basis privilege was claimed; and
(c) They had reason to believe that there were other recipients to the emails listed in Part 2 whom had not been disclosed which was relevant to the question of confidentiality.
By further affidavit of the defendants’ solicitor sworn on 13 June 2018, copies of three subpoenaed documents listed in Part 2 of the plaintiff’s third further affidavit of documents were exhibited at “CWP-3”.
It was common ground between the parties that the 19 documents contained in Part 2 comprised 3 email chains, being:
Documents 97-104;
Documents 106-111; and
Documents 112-113.
Legal Framework
Client privilege at common law and pursuant to the Evidence Act 2008 (Vic) protects communications between a legal adviser and client from compulsory disclosure. The defendants seek to contest the existence of privilege asserted by the plaintiff. Alternatively, they argue that privilege has been waived.
Chief Justice Gibbs in Baker v Campbell (1983) 153 CLR 52 at 66 observed that the public interest behind privilege is –
…. to ensure that the client can consult his lawyer with freedom and candour, it being thought that if the privilege did not exist a man (sic) would not venture to consult any skilful person, or would only dare tell … half his case.
To establish privilege, the plaintiff must satisfy three limbs:
(a) Communications must pass between the client and the client’s legal adviser;
(b) The communications must be made for the dominant purpose of enabling the client to obtain legal advice (advice privilege) or for the purpose of actual or contemplated litigation (litigation privilege); and
(c) The communication must be confidential.
The Act has been amended in 2009 to also ensure that privilege attaches to any confidential document prepared by a client, lawyer or third party (for example, proposed expert witness or an accountant) for the dominant purpose of legal advice being obtained.[1] It does not extend to all communications with a third party (client and lawyer or between two or more lawyers acting for the client sections 118(a) and (b)).
[1]Pratt Holdings v Commissioner of Taxation (2004) 136 FCR 357
The present case only involves a claim for advice privilege. Section 118 of the Evidence Act 2008 provides confidential communications and confidential documents that have been prepared for the dominant purpose of providing legal advice to the client are privileged. Legal advice includes any advice of what “may be prudently and sensibly done in the relevant legal context”.[2]
Legal Advice
[2]Workcover Authority of NSW, General Manager v Law Society of NSW (2006) 65 NSWLR 502 at [77] citing Balabel v Air India [1988] Ch 317 at 330.
“Legal advice” has been interpreted broadly[3] and can include commercial advice if the legal advice is the dominant purpose but privilege will not attach to advice given for a commercial purpose or non-legal purpose. The advice must be professional advice given by a lawyer who is acting in a legal capacity to provide legal advice. The advice can go beyond formal matters of law but it must relate to the law.[4] Further, the relevant time for assessing whether the conditions for a valid claim of privilege are satisfied is the time in which the communication was made or the document prepared.[5]
[3]DSE (Holdings) Pty Ltd v InterTan Inc & Anor [2003] 135 FCR 151; FCA 1191 at [52].
[4]Odgers at [1.3.10490]
[5]D Heydon Cross on Evidence at [25210]; Carnell v Mann (1998) 159 ALR 647
Therefore privilege will not attach solely to documents containing legal advice to the client or the request of the client for legal advice but also to:
(a) Documents passing between them containing information to enable the legal advice to be sought or given;
(b) Advice as to what should be prudently and sensibly done in a relevant legal context, for example, relating to the obtaining of legal advice in negotiations for a lease.[6]
[6]Balabel v Air India [1988] Ch 317 at 330.
The first element is that the communication must pass between the client and the client’s legal adviser. The court must consider:
(a) Whether the plaintiff has come to stand in a relationship of trust and confidence with the legal adviser in circumstances where there is a duty by the advisor to promote the plaintiff’s interests;[7]
(b) The solicitor-client relationship must exist or at least be in contemplation at the time of the communication. It is helpful if there is a contract or retainer between the parties, although it is not necessary[8];
(c) Whether the communication falls within the scope of the professional relationship of solicitor and client[9];
(d) Unlike section 119 litigation privilege, section 118 does not protect confidential communications between the solicitor or client and third parties. Advice Privilege only protects the contents of a confidential document prepared by the client, lawyer or another person for the dominant purpose of the lawyer providing legal advice to the client. This difference is consistent with the ALRC view that third party communications for legal advice should not be privileged.
[7]Apple v Wily [2002] NSWSC 855.
[8]Apple v Wily ibid, Minter v Priest [1930] AC 558.
[9]Sommerville v Australian Securities Commission (1995) 131 ALR 517.
“Communication” is not a defined term in the Act. The Macquarie Dictionary meaning includes “the imparting or interchange of thoughts, opinions or information by speech, writing or signs”. In Telstra Corp v Australis Media Holdings (1997) 41 NSWLR 147 at 149, McClelland CJ in Eq noted that if the “essential character” of the document is that of a communication then subsection (c) is not engaged and the document must find its privileged under sections (a) or (b). If the essential character of the document is not a communication, then subject to satisfying the other requirements, it may be protected under section (c).
In Telstra Corp v Australis Media Holdings (1997) 41 NSWLR 147 at 149, McClelland CJ in Eq adopted a narrow interpretation of section 118(c). This is because to read it broadly would subsume most if not all of the communications falling within sections (a) and (b). The Act therefore applies to documents prepared for the required dominant purpose, even if the document is in draft and is not communicated to the client.[10]
[10]Matthews v SPI Electricity Pty Ltd & Ors (No 7) [2013] VSC 553 at [15].
The learned author, Odgers at [1.3.10400] states that if a communication refers to an earlier communication then each communication must be considered separately and non-privileged material does not become privileged by later being included in a privileged communication.[11] See also Taylor LJ at 330 in Balabel v Air India:
Where information is passed by the solicitor or client to the other as part of the continuum aimed at keeping both informed so that advice may be sought and given as required, privilege will attach.
Dominant Purpose
[11]Uniform Evidence Law in Victoria (2010).
The second element that the plaintiff must satisfy is that the communication is made for the “dominant purpose” of enabling the client to obtain legal advice.
Chief Justice Barwick in Grant v Downes at 678 noted that:
It seems to me to be preferable to test the status of each document according to the purpose of its production … for my part, I prefer the word “dominant” to describe the relevant purpose. Neither “primary” or “substantial”, in my opinion, satisfies the true basis of the privilege.
In Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404 at 416, the dominant purpose test was explained:
In its ordinary meaning, dominant indicates that purpose which was the ruling, prevailing or most influential purpose.
The dominant purpose test is objective having regard to all of the evidence, with regard to all of the circumstances in which it was made and its nature[12]. The purpose for which the communication is made or a document is created is a question of fact.[13] It has been suggested to involve these questions:
“would the communication have been made or the document prepared even if the suggested dominant purpose had not existed? If the answer is ‘yes’, the test is not satisfied. If the answer is ‘no’, the test will be satisfied, notwithstanding that some ancilliary use or purpose was contemplated at the time”[14]
[12]Grant v Downes (1976) 135 CLR 674 at 688 per Stephen, Mason and Murphy JJ.
[13]AWB v Cole (No 5) [2006] FCA 1234 at 45 per Young J.
[14]S Odgers, Uniform Evidence Law, 10^th ed at [1.3.10520].
Justice Young in AWB Ltd v Cole (No 5) held that the word “dominant” means a “clear paramountcy” of purpose.[15]
[15](2006) 155 FCR 30 at 45.
Justice Callinan said in Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49 at [172] that “subjective purpose will always be relevant and often decisive”[16]. It is usually the purpose of the author of the document that is the relevant purpose. However, if a solicitor commissions the preparation of a document then the relevant purpose will be that of the solicitor who calls the document into existence.[17]
[16]Odgers at [1.3.10500].
[17]Matthews v SPI Electricity Pty Ltd & Ors (no 6) [2013] VSC 422 R [53] per Derham AsJ.
Grant v Downes makes clear that if the document would have been prepared irrespective of the intention to obtain legal professional services, then it would not satisfy the test for privilege.[18]
[18]At 688 per Stephen, Mason and Murphy JJ.
Associate Justice Derham in Matthews v SPI Electricity Pty Ltd & Ors (No 6)[19] observed that there is a two-step approach endorsed by the Court of Appeal in Carter Holt Harvey Wood Products Australia Pty Ltd v Auspine Ltd[20] in determining the dominant purpose:
(a) ascertaining the subjective purpose or purposes of the person or persons making or commissioning the communication in question;
(b) if the Court concludes that there was more than one purpose, at least one of which was a purpose capable of attracting legal professional privilege, to determine whether the party claiming the privilege has established that the privileged purpose was the dominant purpose, a determination that must be made objectively. [Emphasis added]
Confidential
[19][2013] VSC 422 at [57].
[20][2008] VSCA 59 at [3] per Maxwell P.
The final limb is that the communication between the legal adviser and the client must be confidential.[21] Having a third party present at the time of the communication does not necessarily prevent it from being privileged, however, it has a tendency to point towards a conclusion that the communication was not intended to be confidential.[22]
[21]Wheeler v Le Marchant (1881) 17 Ch D 675.
[22]R v Braham [1976] VR 547.
Section 117 of the Act provides the following definitions of “confidential communication” and “confidential document”:
"confidential communication" means a communication made in such circumstances that, when it was made—
(a) the person who made it; or
(b) the person to whom it was made—
was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law;
"confidential document" means a document prepared in such circumstances that, when it was prepared—
(a) the person who prepared it; or
(b) the person for whom it was prepared—
was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law;
Communications between a solicitor and client in which the client instructs the solicitors to repeat to the other side are not confidential and therefore not privileged.[23]
Waiver
[23]Conlon v Conlons Ltd [1952] 2 All ER 462 at 466.
If privilege is established then it can only be waived by the client with their consent. A waiver of privilege may be express or implied.[24]
[24]Divall v Mifsud [2005] NSWCA 447.
Mann v Carnell[25] explains the concept of implied waiver as follows:
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. [emphasis added]
[25](1991) 201 CLR 1.
Section 122 now reflects the principles in Mann v Carnell and focusses on the conduct of the claimant and whether their behaviour was inconsistent with the maintenance of the confidentiality between lawyer and client.[26] The question of inconsistency depends ‘upon the circumstances of the case … questions of waiver are questions of fact and degree’[27]
[26]Odgers at [1.3.11070]; Commonwealth of Australia v Sanofi [2017] FCA 382 at [74]-[75] per Nicholas J.
[27]Osland v Secretary to the Department of Justice (2008) 234 CLR 275 at [49]; Viterra Malt Pty Ltd v Cargill Australia Ltd [2018] VSCA 118 at [72].
Section 122(2) provides:
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.

Section 122(3) states:
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.
A document that has been disclosed through inadvertence, mistake or error may still be privileged. A solicitor has ostensible authority to waive privilege of the client.[28] However, if a party fails to make a claim that the document was privileged for a substantial time period after the party knew that the document was in the hands of the Registry pursuant to subpoena or a third party after inspection, the party will have been held to have waived privilege.[29] If the client or their solicitor omitted to claim privilege when the claim was available to be made, then it could constitute a waiver. If a court finds that the privilege in the communications have not been waived then the disclosed documents must be returned and copies destroyed.[30]
[28]QUBE Logistics (Vic) Pty Ltd v Wimmera Container Line Pty Ltd [2013] VSC 695 per AsJ Derham.
[29]Spedley Securities Ltd (in liq) v Bank of New Zealand (1991) 26 NSWLR 711.
[30]INSTIL Group Inc v Zahoor [2003] 2 ALLER 252.
A question then arises as to whether a document which has been produced means that related documents for which privilege has been claimed has been waived. Fairness may require that the related documents be produced and waiver implied, for example, if non-disclosure of the related document may result in the other party not understanding the significance of the document produced.[31]
[31]McKenzie v Cash Converters International Ltd [2017] FCA 1564 at [80].
The burden of proof in relation to waiver lies with the party who asserts that the privilege has been lost[32].
[32]Hodgson v Amcor Ltd (2011) 32 VR 568 at [13]-[22].
In the present case, the defendants issued a subpoena addressed to the plaintiff’s commercial real estate agents, Burgess Rawson & Associates, on 12 February 2018. On 5 March 2018, Burgess Rawson produced to the court, without objection, documents in answer to the subpoena. The plaintiff was notified on 7 March 2018 of the production of the subpoenaed document and also made no objection to the subpoena. As such, on 23 March 2018, the defendants’ solicitor inspected and copied the subpoenaed documents. It was common ground between the parties that the plaintiff’s claim for privilege of 19 documents in Part 2 its affidavit of documents concerned three of the documents produced by Burgess Rawson. It was not until the hearing before me that the plaintiff sought to make an oral application that the three disclosed documents be returned and copies destroyed.
In my view, in circumstances where the plaintiff knew that the subpoenaed documents had been produced on 7 March 2018 and inspected by the defendants on 23 March 2018, the delay between 7 March 2018 and 27 April 2018 (the date of the second further affidavit of documents), alternatively, 7 March 2018 and 4 May 2018 (the first return of the challenge to privilege) for the plaintiff’s claim of privilege over the three documents produced pursuant to subpoena on 5 March 2018 constitutes waiver.
Further, for the reasons set out above, fairness requires that the email chain belonging to documents 108-110, comprising documents 106-111, must also be released.
In oral submissions, the plaintiff noted that two documents that were in Part 2 of the second further affidavit of documents had been incorrectly moved to schedule 1 of the third further affidavit of documents at document discovery numbers 88 and 99 (old numbers 74 and 81 respectively). The plaintiff still wished to maintain privilege over these two documents. The defendants submitted that this constituted implied waiver of the documents. There was no evidence before me as to how these two documents came to be relisted in schedule 1 and whether it was through inadvertence, mistake or error. In any event for the reasons set out below, in my view, the plaintiff has failed to establish that the documents are privileged in the first instance.
Further, document 81 is described as an “Email chain between Adam Thomas, Sam Delorenzo and Adam Zuchowski regarding “Boneo Road Default””. The defendants contend that Mr Thomas is a third party and as such the plaintiff is precluded from claiming privilege as the document does not constitute a professional communication of a confidential character between the plaintiff and its solicitor for the purpose of obtaining legal advice.
The difficulty for the plaintiff is that there is no evidence before the Court to the effect that Mr Thomas was retained or employed as an agent of the plaintiff to obtain legal advice or stand in the shoes of the plaintiff in relation to privilege protection such that Mr Thomas’ communications with the lawyer stands in the same position as communications of the client with its lawyer per DSE (Holdings) Pty Ltd v InterTan at [75], [91]-[92], [94], [96].
Onus
Even if I am wrong in relation to the issue of waiver, in my view, for the reasons set out below, the plaintiff has failed to discharge its onus on the balance of probabilities that the 19 documents in Part 2 are privileged.
The party claiming the legal advice privilege bears the onus of establishing the basis of the claim. The party seeking production does not bear the onus of excluding privilege.[33]
[33]Hastie Group (in liq) v Moore [2016] NSWCA 305.
That is, the plaintiff must establish facts from which the court can determine the basis of the claim for privilege and whether the privilege is capable of being asserted.[34] The facts are to be proved on the balance of probabilities (section 142 of the Act).[35]
[34]National Crime Authority v S (1991) 29 FCR 203 at 211.
[35]Odgers at [1.3.10600].
The onus can be met by evidence which allows the court to infer the reasons why a communication was made, such a report prepared in response to an engagement letter: Hastie Group at [29], [31]-[34]. It is not necessary that the party provide evidence in the form of an express statement such as “my only reason for obtaining this report was because I wished to provide it to counsel so that they could give me legal advice” as that would raise the bar beyond the standard of Grant v Downes.[36] However, the purpose for which the communication is made or a document is created cannot be proved by mere assertion[37] and the use of the formulaic statement of “confidential communication … in connection with …”[38]. It must be verified on oath and proper particulars of the claim be provided.
[36]Hastie at [32]
[37]Odgers at [1.3.10600] citing Kennedy v Wallace (2004) 142 FCR 185 at [13] per Black CJ and Emmett J.
[38]AWB v Cole (no 5) at [44] per Young J.
In Barnes v Commissioner of Taxation[39], the Full Court of the Federal Court (Tamberlin, Stone and Siopsis JJ) observed, in respect of the evidence tendered before it (at [16]):
This affidavit falls far short of providing any adequate basis for claiming privilege in respect of any individual document. It consists of assertions, conclusions and generalised comments. The documents referred to are from a number of sources. The Further and Better Particulars of Statement of Claim furnished by the appellants refer to several different persons or entities who are said to have been originators of the documents. However, no evidence has been adduced from any of those persons. Most notable of all is the absence of any evidence from Mr Calder. In this context, the fact that Mr Barnes’ affidavit does not clarify the reason why any specific document came into existence means that the Court is left to consider the documents on their face and determine as best it can whether the documents are privileged. This is unsatisfactory.[Emphasis added]
[39](2007) 242 ALR 601.
Justice Brereton in Carbotech-Australia said at [17], referring to Barnes v Commissioner of Taxation said:
As the full Federal Court said, "this is unsatisfactory", not only because it requires the Court to undertake the exercise of perusing an extensive amount of documentation to infer their dominant purpose, unassisted by evidence of those who might sensibly cast light on it, but also because it deprives the party opposing the claim of privilege of an opportunity to test it, and of knowledge of the material that is put before the Court for it to consider. There is also the general undesirability of the Court being compelled to consider material which it has been asked to, and may, exclude from evidence. [Emphasis added]
In the context of production under subpoena, Justice Brereton in Hancock v Rinehart (Privilege)[40] held at [7] in a similar application that:
To sustain a claim of privilege, the claimant must not merely assert it; but must prove the facts that establish that it is properly made. Thus a mere sworn assertion that the documents are privileged does not suffice, because it is an inadmissible assertion of law; the claimant must set out the facts from which the court can see that the assertion is rightly made or in other words “expose … facts from which the [court] would have been able to make an informed decision as to whether the claim was supportable”. The evidence must reveal the relevant characteristics of each document in respect of which privilege is claimed, and must do so by admissible direct evidence, not hearsay. [Emphasis added]
[40][2016] NSWSC 12. .
At paragraph [16]-[17], his Honour observed:
Nonetheless, no-one involved has deposed to the purpose for which the disputed documents were created, which leaves Mrs Rinehart devoid of testimonial evidence on the essential fact she must prove to establish her claim of privilege. In those circumstances, not only will the court not readily infer a dominant privileged purpose in the absence of evidence from those who might have illuminated it, but it may infer from the failure to call the witnesses who could have done so that their evidence would not have assisted the claim. [Emphasis added]
…
There is no testimonial or documentary evidence – save potentially the disputed documents themselves, to which I shall shortly come – as to the circumstances in and purpose for which they were created.
Similarly to the present case, Hancock v Rhinehart (Privilege) involved the situation where the claimant for privilege pressed the Court to inspect the disputed documents to determine the claim for privilege in the absence of an affidavit of the claimant personally (or author of the communication or document) making or proving the claim for “legal professional privilege” other than the assertion of an umbrella “reason” for each of the 19 documents set out in Part 2 of the third further affidavit of documents that “the document is a professional communication of a confidential nature between the party and its solicitor for the purposes of obtaining legal advice”.
It is noted that the claim does not extend beyond alleged party and solicitor and therefore on the face of it, the claim for privilege does not extend to any confidential communications between the plaintiff and its lawyers (including the plaintiff’s agents)[41] made, or confidential documents prepared the plaintiff and its lawyers or others, for the dominant purpose of the plaintiff being provided with legal advice. Therefore, the claim for privilege is only founded on subparagraph (a) and the documents are not communication made between 2 or more lawyers (subparagraph (b)) or a document prepared by the client, lawyer or another person (subparagraph (c))s.
[41]See definitions at section 117 for “client” and “party” which includes its agents.
Despite what was asserted in the plaintiff’s third further affidavit of documents, the plaintiff’s counsel made oral submissions that the legal advice privilege was founded on two basis:
(a) professional communications of a confidential character between Evan Ellis Lawyers and its client for the dominant purpose of obtaining legal advice concerning land and licence transactions; and
(b) professional communications of a confidential character between Evans Ellis Lawyers and “Network Legal Conveyancing” for the dominant purpose of obtaining legal advice concerning land and licence transactions.
The plaintiff submitted that privilege should be drawn from the accumulation of (a) the affidavits of documents sworn by one of the directors of the plaintiff stating columns “grounds for objection” and “reason”; (b) the description of the documents contained in Part 2; (c) a table prepared by counsel as an index to the documents themselves; and (d) inspection by the court of the Part 2 documents themselves, which the court was asked to undertake by the plaintiff.
In the present case, despite an adjournment and my orders from 4 May 2018 to enable the plaintiff to provide evidence in support of its privilege claims, by the return hearing date there was:
(a) an absence of even a proven existence of a retainer or cost agreement between the plaintiff and “Adam Zuchowski” and/or Evans Ellis Lawyers and/or “Network Legal Conveyancing”;
(b) no admissible evidence before me that “Rhiannon Leonard” was the plaintiff’s conveyancing clerk, (and later submitted by the plaintiff, a paralegal now trainee lawyer);
(c) no admissible evidence explaining the corporate structure of the plaintiff and “Canberra Early Learning Centre” and how this was said to be relevant to the claim for privilege over the Part 2 documents;
(d) no admissible evidence explaining the relationship between “Network Legal Conveyancing” and Evans Ellis Lawyers and how this was said to be relevant to the claim for privilege over the Part 2 documents;
(e) an absence in the reasons stated in the four affidavit of documents sworn by a director of the plaintiff and relying on limb (b) of section 118 of the Act; and
(f) no evidence about the subject matter and the context of the communications that would have an implied obligation of confidentiality even in the absence of labelling communications “privileged and confidential”.
The plaintiff sought to rely on the Federal Court case of Asahi Holdings (Australia) Pty Ltd v Pacific Equity Partners Pty Ltd (No 4),[42] (Asahi) to support its proposition that legal advice privilege can apply to communications with third party commercial advisers. I also note at [29], Justice Beach observed in that case that the claimant had the onus of establishing the claims, “including each factual element necessary to establish the requisite dominant purpose. In that respect, focused and specific evidence is required in respect of each communication, rather than mere generalised assertion let alone opaque and repetitious verbal formulae. There should be sufficient evidence which proves directly or by inference that the dominant purpose for the communication was for the relevant client to be given or obtain legal advice”. (emphasis added)
[42][2014] FCA 796 per Beach J at [38]-[40].
In Asahi, the Court received sworn evidence from the claimant’s solicitor, who was cross examined, two documents tendered at the hearing and the documents themselves.
Although it is acknowledged post Pratt Holdings Pty Ltd v Commissioner ofTaxation that privilege may attach to any confidential document prepared by a client, lawyer or third party (for example, proposed expert witness or an accountant) for the dominant purpose of legal advice being obtained, the test to be applied to determine whether the emails in question were appropriately the subject of a claim for privilege was whether the dominant purpose of the relevant confidential communications, determined at the time they were made, was to give or receive legal advice. The mere fact that communications between a third party and the client had been copied to the client’s lawyers is not sufficient to give rise to privilege. It remains necessary that the communications in question are made for the purposes of the lawyer’s retainer to provide legal advice.[43]
[43]DSE (Holdings) Pty Ltd v InterTan Inc at [102], [112].
Justice Beach found that of the 8 documents only 3 were privileged in their entirety and 5 were only partly privileged. This is because even if the non-legal advice relating to a document is sent by lawyers, and even if that non-legal advice is ultimately communicated back to the lawyers, directly or through the client, it would not automatically mean the communication met the dominant purpose test.[44]
[44]At [67].
Although the plaintiff at the hearing made submissions that a communication made by a third party adviser to a client’s lawyer (per Asahi and DSE), if made for the requisite dominant purpose of the client obtaining legal advice from its lawyer, will be privileged, the third further affidavit of documents does not describe any of the 19 documents as ‘a communication between a third party adviser and the plaintiff’s lawyer’; there is no evidence before the court as to the role of any of the alleged third party advisers and any agency, nor does the formulaic “reason” column rely on this basis.
The facts asserted in the “reason” column of the third affidavit of documents are an umbrella unverified assertion of no evidentiary value. Despite my orders of 4 May 2018, the affidavit does not depose to anything in the column “reason” about the facts and circumstances under which privilege is claimed in order to verify the privilege claim.[45]
[45]See subparagraph 2(b) and (c) of the orders of 4 May 2018 which required the plaintiff to “state the grounds on which privilege is claimed and verifies the claim for privilege” and “proper particulars verifying the grounds for the claim to privilege”.
The defendants further complained about the accuracy of the description of the documents in Part 2. When having regard to the documents produced under subpoena being documents 108-110 described as “Email from Adam Zuchowski to Sam Delorenzo regarding “RE: Kritsonis purchase from Vic Kids Property Pty Ltd ATF Vic Kids Property Trust 125 & 127 Boneo Road, Rosebud” and exhibited to the affidavit of the defendants’ solicitor at “CWP-3”, the description is not accurate.[46] These email chains are not solely between the client and its solicitor but are also addressed to or carbon copied to other persons, including the plaintiff’s real estate agent and conveyancing clerk.
[46]The Court also notes that the plaintiff did not object to the copies of the subpoenaed documents being exhibited to the defendants’ solicitors’ affidavit or require the exhibits to be marked confidential or privileged and sealed.
In circumstances where the plaintiff seeks to rely on the description of the document to support its claim that the document is a professional communication of a confidential character between the party and its solicitor for the purposes of providing legal advice, the omission of the other addressees, such as one “Adam Thomas[47]” and one “Rhiannon Leonard”[48] is of concern. The authorities state that the inclusion of other parties to the communication is not in and of itself fatal to a claim for confidentiality. It does, however, point towards a conclusion that the communication is not confidential.
[47]From other exhibited documents contained in the defendants’ solicitors’ affidavit at “CWP-4”, it is revealed that Adam Thomas was the senior sales executive at Burgess Rawson
[48]Counsel for the plaintiff gave evidence from the bar table that Rhiannon Leonard was a conveyancing clerk.
Therefore, even if I am wrong on the basis, of waiver of privilege in respect of the three documents produced under subpoena and/or the balance of probabilities, these documents were reproduced as exhibit “CWP-3” to the defendants’ solicitor’s affidavit. In my view, documents 108-110 are not privileged for the following reasons.

In the plaintiff’s table of submissions, Document 108 is said to be “email from lawyer seeking instructions to enable advice”. Just because an email is sent between a solicitor and client does not prima facie establish privilege.[49] The purpose of the email must be provided by way of admissible evidence and not mere assertion. Further, the subpoenaed document “CWP-3” (discovered document 108) contains a draft email correspondence that was addressed to Georgie Cloak of Billings Cloak – the defendants’ solicitor. The authorities state that communications between a solicitor and client in which the client instructs the solicitors to repeat to the other side are not confidential and therefore not privileged.
[49]Balabel v Air India at 330 per Taylor LJ.
Document 109 in the table of submissions is said to be “instructions re prospective dispute”. The claim for privilege is legal advice not anticipated or actual litigation. In any event, the communication is not between the client and lawyer for the dominant purpose of providing legal advice to the client but rather to settle the draft email correspondence addressed to the defendants’ solicitors. The communication is transactional and not related to the obtaining of legal advice.
Document 110 in the table of submissions is said to be an “email from lawyer”. However, it is also addressed to the client, real estate agent and conveyancing clerk. Again, the communication is about whether the draft email correspondence should be sent to the defendant’s solicitor. It is not a confidential communication for the dominant purpose of the lawyer providing legal advice. It is a request by the lawyer to send the draft email set out in document 108 to the defendants’ solicitor and therefore cannot be privileged.
Whether the Court should exercise its discretion to inspect
At [18] and [31], in Hancock v Rhinehart (Privilege), Justice Brereton observed:
The issue is whether a person claiming privilege can sustain the claim by adducing no testimonial evidence of the purpose for and circumstances in which the subject documents were created, but merely asking the court to inspect the documents for the purpose of ruling on the claim – a course which Mrs Rinehart submitted was authorised by Grant v Downs..
….
The preferable explanation of the court’s power to inspect the documents is that it exists not to facilitate proof by a claimant of the facts required to sustain the claim, but to provide a means of enabling a claim to be scrutinised and tested. This view of the power is derived from the historical evolution of the means of scrutinising a claim in the context where the oath of the claimant was once regarded as conclusive.
… a party is not entitled to insist on the court inspecting the documents, it being a matter for the discretion of the judge, who will only do so if there is good reason. While those comments have been made in response to requests by applicants for production asking the court to go behind the affidavit evidence in support of the claim and inspect the documents, they apply a fortiori where the claimant, having adduced insufficient evidence otherwise to sustain the claim, requests the court to inspect the documents (to the exclusion of the applicant).
[emphasis added]
After considering in detail the history of judicial power to inspect documents over which privileged is claimed and the authorities in the area, Justice Brereton further found at [34]:
Whether the creature of judicial decision or, as I think more properly, rules of court, the court’s power to inspect documents – and to require their production for that limited purpose – was a response to the potential injustice in treating the claimant’s oath as conclusive. The power was not intended to detract from the requirement that a person claiming privilege prove, by admissible evidence, the grounds of the claim. While it is clear that the court may now require a document the subject of a claim of privilege to be produced so that it may inspect it for the purpose of ruling on the claim, that is quite a different notion from permitting a person claiming privilege to sustain the claim by adducing no testimonial evidence but asking the court to inspect the documents. The privilege being a privilege against production, it permits the person entitled to the privilege to refuse to produce the document to the court. To voluntarily proffer the documents for inspection – as opposed to doing so pursuant to a requirement made by the court under UCPR r 1.9(5)(c) – is inconsistent with maintaining the claim. [Emphasis added]
In summary, Justice Brereton concluded at [35]-[36] that:
(a) Generally, it is inconsistent with the maintenance of privilege for a party to voluntarily put the documents before the court, even for limited purpose of inspection by the court;
(b) The claimant must establish the privilege by admissible direct evidence on oath. The claim may be tested by cross-examination. The court’s power to inspect the documents – and to require their protection for that limited purpose – is not intended to detract from the requirement that a person claiming privilege prove, by admissible evidence, the grounds of the claim.
Compare the case of Carbotech-Australia Pty Ltd v Yates[50], in which Justice Brereton inspected some of the documents the subject of the privilege challenge. His Honour relied on Barnes v Commissioner of Taxation[51] and, in the absence of satisfactory affidavit evidence (but where it was possible to infer from the proved existence of a retainer and the dates of and parties to relevant communications that they were for a privileged purpose), and there was no objection to that course, the Court inspected some of the Part 2 documents.
[50](2008) NSWSC 1151 at [15], [19].
[51](2007) FCAFC 88 at [18]-[22].
Conclusion
As Mrs Rinehart in Hancock v Rhinehart (Privilege) had failed to tender admissible sworn evidence amenable to being tested by cross-examination probative of the facts on which the claim for privilege is founded – in particular, the purpose in making the relevant communications –
… it would be contrary to justice to uphold her claim solely on the basis of an inspection of the documents. It follows that the court will not inspect the Schedule 1 documents for the purpose of ruling on the claim, and Mrs Rinehart’s claim of privilege in respect of those documents fails. The documents having already been produced to the court, Bianca will be granted access to them. [emphasis added][52]
[52]At [36] per Brereton J.
Therefore, although I accept that there is a discretionary power of the court to inspect the documents in the course of the hearing of an application making a claim for privilege pursuant to Order 29.13 of the County Court Civil Procedure Rules 2008, this power does not subvert the ordinary obligation upon a party to support a contested claim for privilege by admissible evidence.
The plaintiff has failed to provide any sworn evidence in support of its claim for privilege. I follow Justice Brereton’s decision in Mrs Rinehart’s case and I refuse to exercise my discretion to inspect the 19 documents in Part 2 for the purpose of ruling on the plaintiff’s claim of privilege. As there is no evidence to support the foundation for privilege, the plaintiff’s claim in respect of all 19 documents must fail.
Further, there is no evidence before me supporting the reasons why discovered documents numbers 85,91-96 in Schedule 1 have been redacted. Nor why discovered documents numbers 97-104 contained in Part 2 have been redacted. My orders of 4 May 2018 required that if a document is to be redacted then the affidavit must depose to the grounds on which the privilege is claimed and verification of that claim for privilege. This has not been done.
In conclusion, the plaintiff must produce the documents listed in Part 2 for inspection and the defendants ought to have access to the documents, and including in electronic form.
- - -
Certificate
I certify that these 21 pages are a true copy of the reasons for the decision of Judicial Registrar Burchell delivered on 20 June 2018.
Dated: 20 June 2018.
Larissa Travassaros
Associate to Judicial Registrar Burchell

Vic Kids Property Pty Ltd (ACN 144 889 305) ATF Vic Kids Property Trust	Plaintiff
V
Ionna Kritsonis & Anor	Defendants

JUDGE:	Judicial Registrar Burchell
WHERE HELD:	Melbourne
DATE OF HEARING:	13 June 2018
DATE OF DECISION:	20 June 2018
CASE MAY BE CITED AS:	Vic Kids Property Pty Ltd v Kritsonis & Anor
MEDIUM NEUTRAL CITATION:	[2018] VCC 891

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	J D Catlin	Evans Ellis Lawyers
For the Defendant	P Little	Billings Cloak