Wright Prospecting Pty Limited v Hancock Prospecting Pty Limited (5)
[2007] WASC 139
•12 JUNE 2007
WRIGHT PROSPECTING PTY LIMITED -v- HANCOCK PROSPECTING PTY LIMITED (5) [2007] WASC 139
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2007] WASC 139 | |
| 25/06/2007 | |||
| Case No: | CIV:1279/2001 | 8 JUNE 2007 | |
| Coram: | MURRAY J | 12/06/07 | |
| 12 | Judgment Part: | 1 of 1 | |
| Result: | Leave granted | ||
| B | |||
| PDF Version |
| Parties: | WRIGHT PROSPECTING PTY LIMITED (ACN 69 008 676 417) HANCOCK PROSPECTING PTY LIMITED (ACN 69 008 676 417) MICHAEL JOHN MAYNARD WRIGHT |
Catchwords: | Practice and procedure Subpoena to produce documents Inspection of documents Objection to inspection Confidentiality of documents Legitimate forensic purpose |
Legislation: | Nil |
Case References: | Apache Northwest Pty Ltd v Western Power Corporation (1998) 19 WAR 350 Attorney General (NT) v Maurice (1986) 161 CLR 475 Grant v Downs (1976) 135 CLR 674 Liberty Funding Pty Ltd v Phoenix Capital Ltd (2005) 218 ALR 283 Mann v Carnell (1999) 201 CLR 1 Middleton v Western Australia (1996) 17 WAR 201 RAN v The Queen (1996) 16 WAR 446 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
HANCOCK PROSPECTING PTY LIMITED (ACN 69 008 676 417)
Defendant
Catchwords:
Practice and procedure - Subpoena to produce documents - Inspection of documents - Objection to inspection - Confidentiality of documents - Legitimate forensic purpose
Legislation:
Nil
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Result:
Leave granted
Category: B
Representation:
Counsel:
Plaintiff : Mr R J Brender
Intervenor: Michael : Mr R J Brender
John Maynard Wright
Defendant : Mr S J Rushton SC & Mr J D MacLaurin
Solicitors:
Plaintiff : Lavan Legal
Intervenor: Michael : Lavan Legal
John Maynard Wright
Defendant : Salter Power Pty Ltd
Case(s) referred to in judgment(s):
Apache Northwest Pty Ltd v Western Power Corporation (1998) 19 WAR 350
Attorney General (NT) v Maurice (1986) 161 CLR 475
Grant v Downs (1976) 135 CLR 674
Liberty Funding Pty Ltd v Phoenix Capital Ltd (2005) 218 ALR 283
Mann v Carnell (1999) 201 CLR 1
Middleton v Western Australia (1996) 17 WAR 201
RAN v The Queen (1996) 16 WAR 446
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1 MURRAY J: This is an application made by the defendant in the course of the trial of the principal action. The application is made at the stage of the trial when the plaintiff is effectively at the point of the closure of its case. The application is that the defendant's solicitors be permitted to inspect and copy certain documents provided upon the return of a subpoena to produce documents served on a Ms Christine Little. The application is opposed by both the plaintiff and Mr Michael Wright, to whom I afforded leave to appear and be heard upon the application.
2 A subpoena to produce documents directed to Ms Little was issued out of the Court on 3 May during the course of the trial. The documents sought were affidavits or statements sworn or made by Mr Wright concerning the value of property belonging to the plaintiff, expert reports or drafts prepared for Mr Wright concerning the value of such property and affidavits and expert reports prepared for Mr Wright relating to the interest of the defendant in mining tenements which, in the principal litigation, have been described as Rhodes Ridge.
3 Ms Little was formerly Mr Michael Wright's wife. Their marriage was dissolved in 1994. The proceedings to that end were conducted upon Ms Little's application in the Family Court of Western Australia. Those proceedings were instituted in 1993 and concluded in 1994. They involved not only the dissolution of the marriage but the settlement of property matters between husband and wife. The course of the proceedings in the Family Court was able to be charted by the parties to this application when the Family Court file was delivered to this Court as a matter of inter-court comity upon a request made by this Court.
4 Ms Little had initially some difficulty in finding documents of the kind described in the subpoena but she was ultimately successful and provided the documents to the Court under the terms of the subpoena. She raises no objection to the defendant having access to the documents to inspect and copy them.
5 Of those documents provided on the return of the subpoena the defendant narrows its focus to an affidavit sworn by Mr Wright in the Family Court proceedings in so far as it concerns the value of Rhodes Ridge, the basis upon which any such valuation was carried out and Mr Wright's views on that topic. The second focus of interest is a report by way of affidavit sworn by a Mr Graham Leslie Keys. Mr Keys is apparently a chartered accountant and was a corporate finance partner with the firm Ernst & Young. I am told that he is not now a member of that firm, but that is really immaterial. It seems that Mr Keys provided his
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- report as to Mr Wright's worth for the purposes of the divorce proceedings.
6 As to that, it seems that when the substantive hearing of Ms Little's application for dissolution of the marriage commenced on 14 February 1994 before McCall J there were before the court chronologies and lists of affidavits filed in the proceedings and served on the other side upon which the parties respectively relied. The trial Judge made it clear that he had read those materials on file. During the opening of Ms Little's case there was reference, as I understand it, to property matters and there was discussion between counsel and the bench. I am told that that discussion referred to the fact that Mr Keys had put the worth of the respondent, Mr Wright, for the purposes of the proceedings, at approximately $75 - $79 million. On the other hand, it seems that an expert engaged by Ms Little put the respondent, Mr Wright's worth at between $110 - $130 million.
7 The experts were present at the Court and available to give viva voce evidence if required but it proved to be unnecessary because the Court accepted the appropriateness of an agreement between the parties that the respondent's worth could be accepted at an undisclosed figure recorded in a document which was received in evidence as Exhibit 1. The property issues between the parties having been settled in that way the two expert witnesses were excused from further attendance, but it seems clear that their respective opinions were relied upon by the parties to achieve the agreement to which I have referred.
8 The applicant, Ms Little commenced upon the presentation of her case. Witnesses were called; their affidavits were put to them and adopted by them. They were not formally tendered in evidence or formally directed by the Court to be taken as read. Nonetheless, it seems clear that the affidavits of witnesses were regarded as forming at least a substantial portion of their evidence-in-chief. My interpretation of the proceedings is that the body of evidence available to the Court would include the affidavits listed by the parties as being those upon which they respectively relied, including those of the expert witnesses to whom I have referred. Where there was a challenge to that material it seems that the witness would be required to be tendered for cross-examination in the ordinary way.
9 Mr Wright's worth was clearly an issue in those proceedings. His affidavits filed in the proceedings might be expected to deal with that matter as was the case of the affidavit provided by Mr Keys. Mr Wright
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- is a director of and shareholder in, the plaintiff, as equally is his sister Mrs Angela Bennett. Both have given evidence before me. Without trespassing too greatly upon matters which will have greater materiality in the final decision of this case it would seem to me to be clear that Mr Wright had a central role, perhaps the predominant role, in guiding and directing the activities of the plaintiff. He has been put forward by the plaintiff as its guiding mind and will.
10 The asset with which the litigation is principally concerned may broadly be described as the interest of the partnership comprised of the plaintiff and the defendant in the mining tenements known as Rhodes Ridge. It must, I think, be the case that one could reasonably assume that in the affidavit material provided by Mr Wright in the divorce proceedings and in the affidavit of Mr Keys in those proceedings, a part of Mr Wright's worth would be his interest personally, through his membership of the plaintiff, in Rhodes Ridge. In addition, the affidavit material referred to in the divorce proceedings might be expected to disclose Mr Wright's views upon the value of Rhodes Ridge and his interest therein. I need not here discuss the way in which Mr Wright's views about such matters become in the proceedings before me an integral part of a cause of action pursued by the plaintiff.
11 It is sufficient that I note that it seems likely that in the documents identified by the defendant as the subject of this particular application there would be material which may relate to the valuation of Rhodes Ridge and the views of Mr Wright about that matter, upon which he was cross-examined at length before me. Further, although those documents were used in Family Court proceedings held in February 1994 and which were finally settled on the fifth day of the trial before McCall J, insofar as they touch upon the valuation in relation to Rhodes Ridge and the views about that of Mr Wright, they might be supposed reasonably to be relevant to those matters at times more material to the proceedings before me, particularly leading up to the death of Mr Lang Hancock, the then principal of the defendant, on 27 March 1992.
12 I summarise my conclusions in that regard. The documents I have in mind as the subject of the views expressed above are three in number, all identified in Mr Wright's non-party discovery given by affidavit sworn on 1 February 2007. Privilege was claimed in respect of each of the documents. They are, an affidavit of Mr Wright sworn on 4 February 1994 in the Family Court proceedings; a facsimile transmission by the accounting firm, Ernst & Young, to Mr Wright's solicitors in those proceedings, Messrs Clayton Utz; and an affidavit of Mr Graham Leslie
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- Keys sworn in those proceedings on 11 February 1994. Those documents are the only documents identified to me as being those which may have been provided on the return of the subpoena by Mrs Little which may relate to the proceedings before me because they may contain material concerned with or relating to the value of the plaintiff's interest in Rhodes Ridge or Mr Wright's views upon the extent of that interest. It is in relation to that material that I will now give consideration to whether the leave sought by this application should be granted.
13 Of course when documents are discovered as those which I have presently under consideration were, despite the claim for privilege attaching to them, the party giving discovery acknowledges their relevance to an issue or issues in the litigation: Middleton v Western Australia (1996) 17 WAR 201, 203, 215. But the question governing an application to inspect and copy documents produced in the court on the return of a subpoena is whether, putting to one side any claim of privilege, there is a legitimate forensic purpose to be served in having access to the documents at the time when access is sought. There is a discretionary judgment to be made pursuant to the Rules of the Supreme Court 1971 (WA), O 36B r 8 and r 9(3), and the considerations affecting the grant or refusal of leave will be those applicable at the time when the court is called upon to exercise its discretion.
14 I was reminded that when Mr Wright was being cross-examined on 20 March he was referred by counsel to an affidavit as to assets filed in the divorce proceedings. Counsel for the plaintiff said that a claim of privilege was maintained in respect of such an affidavit and counsel for the defendant told the Court that in that event he would take the matter no further. That simply means in my view that the Court was not then asked to rule on the matter. It has no bearing upon the way in which the Court should now exercise its discretion.
15 As to that, the requirement that there should be a discernable legitimate forensic purpose in respect of the inspection of defined documents has in my view long been the law. It was authoritively stated for this Court in relation to criminal proceedings in the case of RAN v The Queen (1996) 16 WAR 446 at 453 – 454. Franklyn J with whom Wallwork J agreed, used the expression that the onus lay upon the applicant for inspection to satisfy the court that it was "on the cards" that in respect of particular identified documents there was a legitimate forensic purpose in permitting their inspection, as for example if it could be seen that there were such documents which would materially assist the defence. If all that could be seen was that there was a speculative
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- possibility that that was the case then that would be insufficient to support the grant of leave because it would reveal no more than a "fishing expedition". The third member of the Court, Scott J, agreed with that approach, simply preferring to say that rather than that it was "on the cards" that the documents would be likely to materially assist the defence, "the better test is that there should be evidence that the documents concerned are likely to be relevant for some legitimate forensic purpose before access to the documents is permitted". (456).
16 I do not think the way in which such a matter as this is to be approached by the Court in the context of civil litigation is materially different from what was said in RAN. In my opinion, the essence of the basis upon which the Court will exercise its judgment on an objection to the production of documents in response to a subpoena or as in this case an objection to the Court allowing a party to inspect documents produced to it on subpoena, is the question whether at the time or the stage of the proceedings when the matter is to be tested there is established to be a discernable, legitimate forensic purpose in the production or inspection sought.
17 It must be possible to see that the documents have a relevance to the case of the party seeking access to the documents: Apache Northwest Pty Ltd v Western Power Corporation (1998) 19 WAR 350. In that case the Full Court held that the documents might be held to be relevant, so that there was a legitimate forensic purpose in their production or inspection, without the necessity to be able to see that the documents might be tendered in evidence by the party seeking access to them. It will be sufficient if the documents give rise to a line of enquiry or a matter to be explored, or in some way they may illuminate a factual issue arising in the proceedings, perhaps by meeting the opposing case, for example by cross-examination (374).
18 In this case I am satisfied that the defendant has established the necessary relevance or legitimate forensic purpose in respect of the documents to which I have referred above. They were created within a matter of days before the commencement of the proceedings in the Family Court before McCall J. They were divorce proceedings. Property matters were, when the trial commenced, very much in issue. The worth of the respondent, Mr Wright, must have involved consideration of the worth of his interest as a member of the plaintiff, which in turn would likely involve consideration of its interest in Rhodes Ridge.
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19 These were matters about which it might be supposed that in his affidavit sworn on 4 February 1994, Mr Wright would express views. Mr Wright's views have a relevance advanced by the plaintiff on the basis that he is at least one of those, perhaps the main one of those, whose mind and will was, at relevant times, the guiding mind and will of the plaintiff. On the evidence before me views expressed at the beginning of 1994 might well have a relevance to value which might be established or views which might be held on behalf of the plaintiff, perhaps most pointedly some two years earlier.
20 It is reasonably to be supposed that such matters would be dealt with in Mr Wright's affidavit to which I have referred, and in the affidavit of Mr Keys sworn on 11 February, very shortly before the commencement of the hearing. The facsimile transmission from the firm of which Mr Keys was then a member to Mr Wright's solicitors, might reasonably be expected to relate to matters to be the subject of the affidavit sworn on the following day.
21 Of course Mr Wright's evidence has been given and after lengthy cross-examination, during which the use of his affidavit was not pursued, he has been excused from further attendance. No doubt it is right, as Mr Rushton SC for the defendant told me, that the subpoena to Ms Little had not been issued and the present application could not be brought because of the urgent requirement to deal with more pressing matters. But in my view that provides no excuse and I deal with this application upon the basis that I am not persuaded that if leave were sought to recall Mr Wright to enable him to be further cross-examined, there is any ground upon which I might accede to such an application.
22 Nonetheless, depending upon the nature of the affidavit and its contents, it might be open to the defendant to tender the affidavit as part of its case as a declaration against interest. The weight to be given to such material tendered in that way is of course another matter and if the plaintiff was to seek leave to recall Mr Wright to give him the opportunity to deal with the content of an affidavit he had made tendered in that way, I would obviously view that application very favourably. On the other hand the contents of Mr Wright's affidavit might reveal lines of enquiry or lead to factual material which the defendant might adduce in evidence. It is sufficient if some such outcome should be on the cards.
23 Of course so far as the facsimile transmission and affidavit relating to Mr Keys is concerned the relevance may arise more directly and it is well open that in a number of ways that material might provide evidence
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- which might be utilised by the defendant in opposing the plaintiff's case. In those circumstances, it seems to me that the documents in question ought to be the subject of leave for their inspection, if necessary tailoring the order to accommodate legitimate privacy concerns, unless there is some recognised basis upon which it should be held that the Court should step back from its ordinary stance that it will be generally in the interests of justice, particularly in a document intensive case such as this, that the Court should potentially have available to it all relevant documentary evidence: Grant v Downs (1976) 135 CLR 674, 685.
24 In this case, the plaintiff and Mr Wright argue that the documents in question are the subject of legal professional privilege, a privilege which Mr Wright certainly, and if it is able to do so the plaintiff, also seeks to maintain. That the documents were originally of that character is I think accepted by the defendant and in my opinion, rightly so. These are documents which apparently, having regard to their nature and the circumstances of their making, were communications made in the course of the Family Court proceedings for the purpose of their use in those proceedings at the will of the respondent, Mr Wright, but otherwise possessing a confidential character of the kind which clearly attracts the privilege. If the confidentiality of those documents is to be abandoned it will be because it has expressly or implicitly been waived by the party entitled to assert the privilege, Mr Wright. So much is accepted by the defendant and need not be the subject of further debate but the defendant argues that the privilege may no longer be asserted. It has been waived.
25 What does that mean? It is sufficient to refer to the statement of the law by the majority of the High Court in Mann v Carnell (1999) 201 CLR 1 at 13 [28] – [29] where their Honours said:
"At common law, a person who would otherwise be entitled to the benefit of legal professional privilege may waive the privilege. … Legal professional privilege exists to protect the confidentiality of communications between lawyer and client. It is the client who is entitled to the benefit of such confidentiality, and who may relinquish that entitlement. It is inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege. …
Waiver may be express or implied. Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the
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- 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. … What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large."
26 Here it is not said that there is any express waiver, but what is relied upon is implied waiver. It is argued that the use of these affidavits in the proceedings in the Family Court in the manner to which I have referred above constitutes an implied waiver, conduct inconsistent with the maintenance of the privilege at least when the court has regard to considerations of fairness. In this respect "fairness" is not a term of art. It is the ordinary notion of fairness which will inform the decision of the Court, essentially whether in the circumstances it would be unfair to maintain the privilege: Attorney General (NT) v Maurice (1986) 161 CLR 475, 487.
27 In that regard it is obvious that each case will depend upon its own facts, but I think it useful in the present context to refer to the decision of the Full Federal Court in Liberty Funding Pty Ltd v Phoenix Capital Ltd (2005) 218 ALR 283. The case went on appeal from a decision of a primary Judge that an affidavit sworn in proceedings in the Federal Court was the subject of legal professional privilege and could not be used in proceedings in the Supreme Court of Victoria.
28 The affidavit was ordered to be filed in the Federal Court proceedings and was concerned primarily with the dissemination of a document, at issue in the proceedings. However, the affidavit was not sworn primarily because there was an order that it be filed, but because it was useful and to be relied upon, in relation to the question of the dissemination of the document in the proceedings before the court and, in particular, in connection with a mediation which was to take place.
29 At 288 [22] the Full Court dealt with the matter at issue upon the basis that the affidavit was privileged when sworn. Relying on Mann v Carnell, the court reminded itself that it was confidentiality which was at the heart of legal professional privilege and that if one was considering
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- whether that privilege was waived, "The essence of waiver is not general fairness – it is the inconsistency of the posited act with the confidentiality protected by the privilege (in which analysis fairness may play a part)".
30 The court held that in the circumstances of that case the filing and service of the affidavit were steps taken, "entirely antithetical to the confidentiality that might be said to have previously existed in the content of the document, the communications stated therein and any advice which might be inferred therefrom". The court pointed out that the affidavit was filed and served so that it might be immediately relied upon, including for the purpose of the mediation, and so the question became simply whether the implied undertaking that it would be used only for the purpose of the proceedings in which it was filed and served was to be set aside wholly or in part.
31 In my opinion, those remarks are apposite in this case. Accepting that the documents to which I have referred attracted a legal professional privilege which continued to attach to the affidavits when filed and served, it seems to me that having regard to the way in which the affidavits were used in the Family Court proceedings, that use was antithetical to the maintenance of the privilege. That is so also I think in relation to the disclosed facsimile transmission which, having regard to its discovery and the claim of privilege, must be related to and bound up with the affidavit sworn by Mr Keys.
32 Upon the evidence before me it is likely that the affidavits were sworn, filed and served and their contents therefore disclosed to the applicant wife because they were relied upon by Mr Wright, the respondent husband, to advance his case. As I understand it, those documents were among those so relied upon, as counsel for Mr Wright informed the Court. They were apparently read by the trial Judge in the context of proceedings which appear not to have required the documents to be read and adopted by witnesses giving their evidence orally. In my opinion, it matters not that the property questions arising in the proceedings between wife and husband were ultimately settled. What had occurred before that happened was inconsistent with reliance upon the privilege and would make it unfair to do so in these proceedings, in respect of which it is on the cards that the documents are relevant to issues arising, and when access is sought at a time, albeit late in the proceedings, when a legitimate forensic purpose for the use of the documents may still be discerned.
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33 In my view it follows that access to the documents in question should be granted, but at this juncture at least, limited to leave to inspect and copy the documents being granted to defence counsel, so that their dissemination is no wider than is necessary for the purposes of this litigation. I made that order on 12 June subject only to the question whether the affidavit of Mr Wright contained material which should be treated as confidential and which would be irrelevant to the issues raised in the trial of this action. On 13 June Mr Brender told me that there were no matters of that kind requiring separate identification and so the order made will continue to apply to the whole of the affidavit of Mr Wright. Finally, I should observe that on 13 June I granted a very limited stay of the orders for 48 hours after the publication of these reasons. I would contemplate no extension. These then are the reasons for the orders made.
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