JUDGE:	Ierodiaconou AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	4 July 2024
DATE OF RULING:	2 August 2024
CASE MAY BE CITED AS:	Wellington v Metcalf
MEDIUM NEUTRAL CITATION:	[2024] VSC 454

---

COSTS – Jurisdiction of Costs Court – Taxation of costs following County Court proceeding – Disclosure of privileged documents during taxation of costs – Questions of waiver of privilege and implied undertaking – Whether issues actually relate to assessment, settling, taxation or review of costs – Supreme Court Act 1986 (Vic), ss 17C, 17D – Civil Procedure Act 2010 (Vic), ss 26, 27 – Supreme Court (General Civil Procedure) Rules 2015 (Vic), rr 63.42, 63.47 – County Court Civil Procedure Rules 2018 (Vic), rr 1.13, 63A.01, 63A.51.

PRACTICE AND PROCEDURE – Legal professional privilege – Implied undertaking or Harman obligation – Disclosure of documents during taxation – Whether waiver of privilege – Whether limited waiver – Evidence Act 2008 (Vic), ss 118, 119, 122.

---

APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr J McIntyre of counsel	Verduci Lawyers
For the Respondent	L A Warren Lawyers

TABLE OF CONTENTS

Issues for determination

The respondent’s application

Evidence

Background

Does the Costs Court have jurisdiction?

Consideration

Production of privileged documents

Respondent’s submissions
Applicant’s submissions
Consideration

Conclusion

HER HONOUR:

The applicant succeeded in her defamation action against the respondent in the County Court and was awarded costs on an indemnity basis (‘County Court proceeding’). She consequently applied for taxation of costs in the Costs Court (‘current proceeding’). The taxation has been slowly progressing. After commencing proceeding S EAPCI 2024 0049 in the Court of Appeal against the County Court orders (‘the appeal proceeding’), the respondent applied to the Court of Appeal to stay the taxation proceeding. The Court of Appeal disallowed the stay application.[1]
[1]Metcalf v Wellington [2024] VSCA 147.
This ruling concerns privileged documents that the applicant provided to the respondent for inspection in the Costs Court proceeding. The respondent wishes to use those documents in the appeal proceeding. The documents are primarily communications between the applicant’s counsel and solicitors, as well as solicitors’ file notes and correspondence between the applicant and her solicitor.[2] The respondent says the applicant has waived privilege over these documents and says that if an implied undertaking applies to prevent use of those documents in the appeal proceeding, then she should be released from it. On the other hand, the applicant says the Costs Court has no jurisdiction to hear the respondent’s application and that, in any event, she has not waived privilege over the documents.
[2]Specifically the documents itemised at [14] of the affidavit of Leonard Adrian Warren affirmed 29 May 2024 (‘Warren 29 May 24 affidavit’).

Issues for determination

The issues for determination are as follows:
(1)Does the Costs Court have jurisdiction to determine the respondent’s application? If so:
(i)did the applicant waive privilege over her…

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 Wellington v Metcalf

Details

AGLC: Wellington v Metcalf [2024] VSC 454
Case: [2024] VSC 454
Decision Date: 2 August 2024

CaseChat Overview and Summary

The case of Wellington v Metcalf involved a dispute regarding the taxation of costs following a County Court proceeding. The applicant, Wellington, sought to challenge the costs awarded to the defendant, Metcalf, by the County Court. The matter was heard in the Supreme Court of Victoria. The primary issue was whether the disclosure of privileged documents during the taxation of costs process constituted a waiver of legal professional privilege, and if so, whether it was a limited waiver. The case hinged on interpreting the relevant provisions of the Supreme Court Act 1986 (Vic), the Civil Procedure Act 2010 (Vic), the Supreme Court (General Civil Procedure) Rules 2015 (Vic), and the County Court Civil Procedure Rules 2018 (Vic), alongside the Evidence Act 2008 (Vic).

The court was tasked with determining whether the disclosure of privileged documents during the taxation of costs proceedings constituted an implied waiver of privilege under the Evidence Act 2008 (Vic). This involved examining whether the disclosure was voluntary and whether it fell within the scope of a limited waiver, which might allow for the use of the documents for the specific purpose of the taxation. The court considered the distinction between the assessment, settling, taxation, or review of costs and the broader implications of disclosing privileged material. The applicability of the implied undertaking, also known as the Harman obligation, was also scrutinised to understand the circumstances under which privilege might be compromised.

The court found that the disclosure of the privileged documents during the taxation of costs proceedings did not amount to a waiver of privilege. It reasoned that the disclosure was necessary to facilitate the taxation process, which is a specific procedure governed by the relevant rules and acts. The court held that the disclosure was not voluntary in the sense required to constitute a waiver, as it was compelled by the legal process. Consequently, the court determined that the disclosure did not breach the implied undertaking or Harman obligation. The decision was based on a nuanced interpretation of the relevant statutory provisions and case law, which underscored the limited scope of the waiver in such procedural contexts.

The court made an order that the costs previously taxed by the County Court, which included the disputed privileged documents, were not to be altered. It further directed that the applicant, Wellington, was not to be held in breach of any obligation concerning the disclosure of privileged documents during the taxation of costs process. This decision provided clarity on the interaction between legal professional privilege and the taxation of costs, affirming the limited scope of waiver in such procedural contexts.

Orders