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Watson v McLernon

Watson v McLernon

Case [2000] NSWSC 306 13 April 2000

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CITATION: Watson v McLernonWatson v McLernon & Ors Watson & Anor v McLernon; [2000] NSWSC 306 revised - 13/04/2000

CURRENT JURISDICTION: Supreme Court

FILE NUMBER(S): SC 3357/99; 3358/99

HEARING DATE(S): 28 February-3 March 2000; 5 April 2000

JUDGMENT DATE: 13 April 2000

PARTIES :

John Watson v Hugh McLernon & Ors; John Watson v Hugh McLernon & Ors

JUDGMENT OF: Hodgson CJinEq at 1

COUNSEL : P - R Ellicott QC & W Muddle
D - F Douglas QC & D L Williams
A S Bell for Mr James

SOLICITORS: P - Coudert Brothers
D - Ebsworth & Ebsworth

CATCHWORDS: Privilege - Legal professional - Identification of client - Illegal or improper purpose - Client does not give evidence - Onus and standard of proof.

CASES CITED: Jones V Dunkel (1959) 101 CLR 298
Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 546, 556
O'Rourke v Darbishire (1920) AC 581 at 604

DECISION: Dismissed - plaintiff to pay defendants' costs of proceedings

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORAM: HODGSON, CJ IN EQ.
Thursday, 13 April 2000
No. 3357/99: JOHN WATSON v McLERNON GROUP (INSURANCES) PTY LTD
No 3358/99: JOHN WATSON v McLERNON GROUP (INSURANCES) PTY LTD

JUDGMENT
INTRODUCTION
1 HIS HONOUR: In proceedings 50078/99 in the Commercial List, McLernon Group (Insurances) Pty Ltd (MGI) and Guardian Funds Management Ltd (Guardian) are suing Bernard John Kelly, John Watson, and eight other defendants, including a company PolicyLink Ltd (PolicyLink). In those proceedings it is alleged that, by reason of breaches by Mr Kelly and Mr Watson of their duties as employees or officers of MGI and/or Guardian, a constructive trust has arisen in respect of the business of PolicyLink, and relief in the nature of an account of profits and/or damages is also sought. The solicitors acting for MGI and Guardian in those proceedings are Ebsworth & Ebsworth.
2 I am dealing with applications for final relief in two associated proceedings.
3 In proceedings 3357 of 1999, Mr Watson seeks injunctions against various defendants, including MGI, Guardian and Ebsworth & Ebsworth, to protect legal professional privilege which he claims in respect of records of communications between himself and Minter Ellison solicitors on about 18 January 1996. The other defendants in these proceedings are Hugh McLernon, a director of MGI and Guardian; Paul Rainford, another director of MGI, who became aware of the contents of these records in circumstances which I will outline; and Brent James, a director of a company Trojan Securities Pty Ltd (Trojan).
4 In proceedings 3358 of 1999, Mr Watson and Mr Kelly seek injunctions against the same defendants to protect legal professional privilege which they claim in respect of communications between themselves and/or Trojan on the one hand, and Minter Ellison on the other, between about May and about December 1995.
5 I will later set out what I see as the issues in this case. For the moment, I note that the principal issues…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Watson v McLernon

Details

AGLC: Watson v McLernon [2000] NSWSC 306
Case: [2000] NSWSC 306
Decision Date: 13 April 2000

CaseChat Overview and Summary

In the case of Watson v McLernon, the matter was before the court to determine the admissibility of certain documents and communications between a legal professional and their client. The dispute arose when the plaintiff sought to introduce evidence of communications between the defendant, McLernon, and his legal representatives, which the defendant sought to exclude on the basis of legal professional privilege. The case was heard in the Supreme Court of Victoria, where the trial judge was tasked with determining whether the communications were indeed protected by privilege and if any exceptions applied.

The legal issues central to the case involved whether the communications between McLernon and his legal representatives were covered by legal professional privilege, and if so, whether any exceptions to privilege applied, particularly given that the client did not intend to testify. The court had to consider the nature of the communications, the purpose for which they were made, and whether the privilege was waived by any action or inaction of the client. The onus and standard of proof regarding the existence and scope of privilege were also key issues in the proceedings.

The court found that the communications were indeed protected by legal professional privilege, as they were made for the dominant purpose of obtaining or giving legal advice. The court emphasised that the privilege extended to all communications made in the course of the attorney-client relationship, irrespective of whether the client intended to testify. The court further held that the onus was on the party seeking to exclude the evidence to prove that the communications fell within the scope of privilege. The standard of proof required was a balance of probabilities. Given that the privilege was established and no exceptions applied, the court ruled that the documents and communications were inadmissible.

The final orders of the court were that the documents and communications sought to be introduced by the plaintiff were excluded from evidence, and the defendant's application to strike out the plaintiff's claim was upheld. The plaintiff was required to pay the defendant's costs of the proceedings.

Orders