Wright v David John Neale Lemon as executor of the estate of Michael John Maynard Wright
[2020] WASC 33
•7 FEBRUARY 2020
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: WRIGHT -v- DAVID JOHN NEALE LEMON as executor of the estate of MICHAEL JOHN MAYNARD WRIGHT [2020] WASC 33
CORAM: KENNETH MARTIN J
HEARD: 22 JANUARY 2020
DELIVERED : 22 JANUARY 2020
PUBLISHED : 7 FEBRUARY 2020
FILE NO/S: CIV 1319 of 2017
BETWEEN: JULIAN DAVID MAYNARD WRIGHT
Plaintiff
AND
DAVID JOHN NEALE LEMON as executor of the estate of MICHAEL JOHN MAYNARD WRIGHT
First Defendant
ANGELA MARY MAYNARD WRIGHT BENNETT
Second Defendant
LEONIE BALDOCK
Third Defendant
ALEXANDRA BURT
Fourth Defendant
VOC GROUP LTD
Fifth Defendant
AMB HOLDINGS PTY LTD
Sixth Defendant
WRIGHT PROSPECTING PTY LTD
Seventh Defendant
TERALANI PTY LTD
Eighth Defendant
LAREMONT PTY LTD
Ninth Defendant
Catchwords:
Practice and procedure - Application for leave to inspect subpoenaed documents - Claim of professional privilege over subpoenaed documents - Claim that applicant party holds joint privilege by virtue of position as former director or co-executor of estate - Application dismissed
Legislation:
Nil
Result:
Application dismissed
Category: B
Representation:
Counsel:
| Plaintiff | : | Mr R Butcher |
| First Defendant | : | Ms J Taylor SC |
| Second Defendant | : | Ms J Taylor SC |
| Third Defendant | : | Ms J Taylor SC |
| Fourth Defendant | : | Ms J Taylor SC |
| Fifth Defendant | : | Ms J Taylor SC |
| Sixth Defendant | : | Ms J Taylor SC |
| Seventh Defendant | : | Ms J Taylor SC |
| Eighth Defendant | : | Ms J Taylor SC |
| Ninth Defendant | : | Ms J Taylor SC |
| Subpoenaed Party | : | Mr J Giles SC |
Solicitors:
| Plaintiff | : | Butcher Paull & Calder |
| First Defendant | : | Clayton Utz |
| Second Defendant | : | Clayton Utz |
| Third Defendant | : | Clayton Utz |
| Fourth Defendant | : | Clayton Utz |
| Fifth Defendant | : | Clayton Utz |
| Sixth Defendant | : | Clayton Utz |
| Seventh Defendant | : | Clayton Utz |
| Eighth Defendant | : | Clayton Utz |
| Ninth Defendant | : | Clayton Utz |
| Subpoenaed Party | : | Corrs Chambers Westgarth |
Case(s) referred to in decision(s):
Farrow Mortgage Services Pty Ltd (in liq) v Webb (1996) 39 NSWLR 601
Hamersley Iron Pty Ltd v Hancock (Unreported, WASC, Library No 5195, 23 December 1983)
Hamersley Iron Pty Ltd v National Mutual Life Association of Australia Pty Ltd (1985) 60 ALJR 70
Hancock v Rinehart (Privilege) [2016] NSWSC 12
Iris Diversified Property Pty Ltd (in liq) [2019] NSWSC 1593
National Mutual Life Association of Australia v Hamersley Iron Pty Ltd (Unreported, WASC, Library No 5642, 27 November 1984)
Schreuder v Murray [No 2] [2009] WASCA 145; (2009) 41 WAR 169
State of South Australia v Barrett (1995) 64 SASR 73
KENNETH MARTIN J:
(This judgment was delivered extemporaneously on 22 January 2020 and has been edited from the transcript.)
I am dealing with the plaintiff's chamber summons of 17 December 2019 by which he seeks leave to inspect documents over which legal professional privilege has been claimed by the subpoenaed party, Hancock Prospecting Pty Ltd (HPPL). The plaintiff issued a subpoena to HPPL on 5 November 2019. Upon return of the subpoena, HPPL identified certain documents that fell under the scope of the subpoena but over which it asserts legal professional privilege.
The disputed documents
By his summons the plaintiff seeks leave to inspect all documents over which legal professional privilege is claimed, save for a fax dated 12 November 1986. HPPL has effectively asserted legal professional privilege over five documents (the disputed documents).
The disputed documents are conveniently identified and collected at par 5 of HPPL's written submissions of 17 January 2020. Essentially, they are documents comprising letters, and I deal with them sequentially as follows:
(i)a letter from Keall Brinsden to the Hancock & Wright partnership dated 14 November 1985 and bearing the subject 'Arbitration - Hancock & Wright v Hamersley Iron Pty Ltd';
(ii)a further letter from Keall Brinsden to the Hancock & Wright partnership also dated 14 November 1985 bearing the subject 'Arbitration - Hancock & Wright v Hamersley Iron Ltd';
(iii)a document described as 'Notes on Arbitration between Hancock & Wright and Hamersley Iron Pty Ltd prepared by Keall Brinsden dated 15 November 1985;
(iv)a document, also dated 15 November 1985, described as 'Notes on Arbitration between Hancock & Wright and Hamersley Iron Pty Ltd' prepared by Keall Brinsden with annexures;
(v)a document described as 'Notes on Legal Issues Prepared by Keall Brinsden' dated July 1986. On its face, it appears to be created in July 1986.
This matter is set for trial to commence on 10 February 2020. That trial is to be presided over by Le Miere J. However, given the nature of this application, it was decided that the application should be heard and determined by a judge other than the presiding trial judge. As such, I have been assigned the task of ruling in respect of HPPL's claim of legal professional privilege over the disputed documents. For the purposes of the exercise, effectively, at the behest at least of HPPL and not objected to by the plaintiff, I have personally reviewed the disputed documents which have been sealed within a sealed envelope.
Having inspected the disputed documents, it seems clear to me that they carry the characteristic of being documents generated by lawyers acting and providing advice in the context of pending litigation and an arbitration. The litigation, of course, finally ended up before the Judicial Committee of the Privy Council (see Hamersley Iron Pty Ltd v National Mutual Life Association of Australia Pty Ltd (1985) 60 ALJR 70 delivered on 11 November 1985).That decision followed the initial case stated proceedings before Olney J (see Hamersley Iron Pty Ltd v Hancock (Unreported, WASC, Library No 5195, 23 December 1983)) and an appeal before the Full Court of Western Australia comprising Wallace, Kennedy and Rowland JJ (see National Mutual Life Association of Australia v Hamersley Iron Pty Ltd (Unreported, WASC, Library No 5642, 27 November 1984)). The determined litigation is certainly proximate to the November 1985 Keall Brinsden legal advice for four of the five disputed documents that are the subject of the claim to privilege by HPPL.
The fifth disputed document is slightly different, emerging some eight months later in July 1986. But there can be no challenge to the status of that document also carrying the legal professional privilege immunity against inspection for the holders of that privilege. Certainly, HPPL is one of the joint holders. So also is WPPL. But what of the plaintiff's position?
The issue in the present application
The question which is the subject of the present application is whether the plaintiff, Mr Julian Wright, is himself entitled, in one or two potential capacities, to be characterised as himself being entitled to be a joint privilege holder of the disputed documents along with HPPL and WPPL. Undoubtedly, as one of the two corporate members of the Hancock & Wright partnership and a participant in its own right in the arbitration proceedings, HPPL certainly is one of the joint privilege holders.
Again, it is clear that the other corporate partner, Wright Prospecting Pty Ltd (WPPL) was also a beneficiary of the joint legal professional privilege in all of the Keall Brinsden advices that are the subject of the present application.
On the present application by the plaintiff, there is no suggestion of any waiver of the benefit of their legal professional privilege immunity over these five documents by either HPPL or WPPL.
Background and key dates
Some critical dates bear relevantly on the present application. The plaintiff's father, the late Mr Ernest Archibald Maynard Wright (but referred to invariably as Peter Wright) died on 13 November 1985. Before that, he had relevantly made a last will and testament, on 13 December 1984.
Probate of the late Mr Wright's will and testament was eventually granted to each of his three children, who had been named in his will, as co-executors. A grant of probate was made in this court on 10 July 1986.
So it can immediately be seen that the five Keall Brinsden advices, being the disputed documents, save for the last of them, all came prior to the joint grant of probate to, inter alia, the plaintiff.
At or around 24 April 1987, by order of this court, the plaintiff then ceased to be a co-executor with his brother and sister at that time. Leave was given for him to retire, in effect, as a co-executor under the application of s 20 of the Administration Act 1903 (WA).
It is also relevant to note that an arbitration reference of dispute (to which the disputed documents refer) looks to have been made to the late Mr Brian Shaw QC, at or around 15 January 1986. The arbitral dispute itself eventually came to be settled. That arose under a heads of agreement on 23 December 1987, and the arbitration was thereby resolved.
The pleadings within the present litigation identify the grievances of the plaintiff against a number of parties - there being nine defendants in all. The plaintiff contends, in effect, for misrepresentations or other non-disclosure conduct, essentially, towards him, by reason of which he contends for various relief, including against his siblings, that I do not need to elaborate upon.
The plaintiff's arguments
Those disputes are to be determined by the trial judge when the trial commences very shortly. The immediate question which is now referred to me, on the basis that I could look at all of the documentary legal advice, unlike the trial judge, who might possibly be compromised if, in fact, he was referred to it, gives me an extra level of insight from now looking through those five disputed documents, to confirm that, in fact, they are plainly in the genre of legal advice provided by Keall Brinsden at the time to HPPL and WPPL (then operating in legal partnership under the name Hancock & Wright).
I repeat that there is no challenge, as I understand the plaintiff's argument, which is put briefly under an outline of written submissions filed 17 December 2019, about an existence of the legal professional privilege over the advice in the disputed documents.
Nor did I discern the plaintiff's argument to contend at all that there was any act of waiver in respect of that advice by any relevant holder of the privilege. Rather, the plaintiff's argument is different. It is succinctly captured under par 10 of his written submissions, which reads:
The privilege was joint with various parties of which the Plaintiff was one. He is therefore entitled to inspection.
As arguments came to be developed, the plaintiff's two-fold and alternatively argued basis for the plaintiff's assertion of now being a joint privilege holder, along with HPPL and WPPL, can be characterised as follows. First, his status and office as a former director of the corporation WPPL, who was plainly a recipient of the advice at the time and joint holder of the legal advice is relied upon. Second, the plaintiff's status as a one time co-executor along with his siblings, Michael Wright, his late brother, and Angela Bennett, his sister, over a roughly eight‑month period - between the granting of probate to them on 10 July 1986 and later, the plaintiff's retirement as a co-executor at or around 24 April 1987.
First argument: former WPPL director?
Turning to the first argument, it is important to note that the plaintiff only occupied the office of director of WPPL in the period between 17 August 1986 and 23 February 1987. He, of course, makes this application to inspect the documents produced by HPPL (and the subject of its claim of privilege). HPPL presently accepts that WPPL also was and is a joint privilege holder with it in respect of these five documents.
On the basis that he once was a WPPL director, the plaintiff now contends that he did not then see any of this legal advice at the time and that he should have. This grievance is a part of the subject matter of his litigation. He says further that his office of WPPL director in that period prior to his retirement is enough for him to enjoy a joint privilege immunity along with HPPL and WPPL and anyone else entitled to it. That status would, it is accepted, if established, deter them from raising it against him - as another joint interest holder.
Regrettably for the plaintiff, there is strong Australian case authority going directly against him in relation to the very basis of his argument, which I discussed with his counsel. This is State of South Australia v Barrett (1995) 64 SASR 73. By that decision, the Full Court of the Supreme Court of South Australia (Olsson J and Mulligan J under separate reasons and Cox J in agreement with both), effectively reversed a decision of the trial judge - who had granted access to advice to former directors of a failed South Australian trading institution. This was under circumstances where those former directors were then seeking access to the legal advice on the basis that they were once directors of that failed institution and were therefore, they argued, entitled, on that basis, to retain a joint privilege and thus an entitlement to see the advice.
Olsson J at page 77 said, in addressing the reasoning of the trial judge, which was rejected:
The privilege to which the Bank was entitled always contained, subject only to the qualified right of access recognised by common law. To say, as Perry [J] did, that:
'[i]t seems to me to be inconsistent with the undoubted fact that at the time they held office they could have had access to these documents, that in some way that situation should be regarded as having changed when they ceased to hold office.'
is, with respect, to misconceive the very rationale of the existence of the power.
To my mind, it is nothing to the point to seek to argue that, because the present proceedings against the personal respondents relate to their conduct whilst directors of the Bank, it must follow that they still enjoy the powers which they possessed whilst directors. Such a contention is both illogical as a proposition of law, and flies in the face of the principle from which the authorities to which I have referred derive their validity.
I also refer to Mullighan J at pages 81 and 82 to the same end.
Those observations convincingly negate the plaintiff's first argument that because a former member of a board of a corporation, whilst sitting as a member of the board, had once had access to legal advice provided to the company, that once they cease to be a director they somehow continue to hold any joint privilege in respect of that advice enjoyed by the corporation.
Once a person ceases to act as a director, the 'hat' that they wore at the time which gave them that right to see the advice is then removed. Of course, the factual background to Barrett is different to this matter, as it always is. However, the principle is clear and applicable.
There is further authority in Australia supporting the position reached in Barrett. I refer to Farrow Mortgage Services Pty Ltd (in liq) v Webb (1996) 39 NSWLR 601and to Sheller J's reasons at page 609.
On the basis of all that local authority, which I assess is persuasive, not to mention, binding upon me, the first argument predicated on the plaintiff formerly being a director of WPPL and therefore being entitled to a joint privilege cannot be accepted, and that basis of access on that claim must fail.
Second argument: former co-executor of father's estate
The alternative and (more) emphasised basis by counsel for access, is predicated upon the former status of the plaintiff (along with his late brother and his then sister) as a co‑claimant within the arbitral proceedings, named as such when they were commenced under the reference to Mr Shaw QC as arbitrator, on 15 January 1986.
The contention is that notwithstanding the plaintiff ceased to occupy that status as co-executor from 24 April 1987 or thereabouts, nonetheless, applying some general observations about privilege by Buss JA (as his Honour then was) in Schreuder v Murray [No 2] [2009] WASCA 145; (2009) 41 WAR 169 at [94], particularly by reference to the sub-categories as identified by his Honour towards joint privilege under subpars (d) and (e) of those reasons - that a joint privilege enures towards the plaintiff personally, in his capacity as former co‑executor. This status, it is argued, therefore, is an independent basis to sustain an inability of HPPL to presently raise an existence of legal professional privilege against the plaintiff - as an asserted co-joint legal privilege holder in respect of the five disputed legal advice documents.
Putting aside a temporal problem for the plaintiff that four of the five advices of November 1985 were obviously given prior to the plaintiff attaining the status of co-executor (by the formal grant of probate at 10 July 1986) the greater issue of principle is that it is plain beyond a shadow of doubt that he had ceased to hold that office, from when he retired by order of this court in April 1987.
The question then is whether, some 33 years on, come December 2019, the plaintiff can assert his joint privilege with HPPL as another joint privilege holder against whom HPPL cannot be heard to deny access. Whilst there is no direct case authority qua the position of a former co‑executor, I accept that the present position ought be evaluated by a reference to principles established in respect of trustees to which, I would see, the analogy as being both appropriate and convincing.
Hence, I will evaluate the position, particularly by reference to the two key case authorities, both cited in HPPL's written submissions. First, is the decision of Brereton J in Hancock v Rinehart (Privilege) [2016] NSWSC 12 at [6] where his Honour made the observation which might be accepted, essentially, as self‑evident, that when a trustee obtains legal advice, during the course of the administration of the trust, that the legal advice obtained belongs also to the trust - but not to the trustee personally.
The trustee analogy for legal advice provided to the co-executors of an estate is I accept a presently convincing analogy. But, quite rightly, HPPL, through senior counsel, also referred me to some further observations made subsequently by Black J in Iris Diversified Property Pty Ltd (in liq) [2019] NSWSC 1593 at [34]. By that decision, in a slightly different context concerning a former corporate trustee seeking access to legal advice, in that context of a situation where the first trustee been removed, was in liquidation, and the subsequent trustee was in possession of the legal advice but was denying access to, or denying the ability of the former trustee to utilise that advice which it also held.
Iris Diversified, however, displays a situation of that former trustee's desired utilisation of the legal advice in a context of it seeking to exercise rights of indemnity against trust assets, to which a former trustee indeed does hold rights. But those are indemnification rights held in the capacity of trustee, provided those liabilities incurred by the former trustee were properly incurred by the trustee at the time. Consequently, I assess that case is not a situation of a former trustee seeking to assert an existence of a joint privilege held in their own right, ie, personally, after having ceased to be a trustee, so that they can act in their own interests by reference to the advice that they contend they hold the joint privilege over.
By my analysis, the better analogy is to the earlier discussed position of the former company director as a matter of legal principle, on a basis that once the status of co-executor or co-trustee is relinquished, that the former joint interest holder can no longer assert an entitlement of personal access to that privileged advice on the basis of a joint interest along with the other interest holders in the privilege if they are only seeking to advance their own individual interests that have nothing to do with the interests of the trust (or the estate).
One further point I need to add to the above analysis is that by reference to the plaintiff's pleading in this action, not only did he relinquish a position of co‑executor in April 1987 but, as pleaded by par 17B of his amended statement of claim dated 17 December 2019, it would appear the plaintiff also then relinquished all his rights as a beneficiary in terms of his late father's estate. On that basis, there is a further factual point of differentiation to indicate that the general principles, as articulated by Buss JA in Schreuder, vis-à-vis rights in the context of a trustee and a beneficiary who has a vested interest - are not applicable here to circumstances where any vested interest as a beneficiary had ended at February 1987.
Conclusions
I realise that the relief sought by the plaintiff in the litigation to be determined shortly seeks to disturb the pleaded status quo discussed above. But for the purposes of the evaluation of the present application, that is not something that bears upon the analysis.
Consequently, the predominant verbal arguments that I have heard today concerning co-executorship by the plaintiff as a basis to support his personal access presently to the five privileged documents that are objected to him inspecting - can also not, when evaluated, legitimately sustain his application. Consequently, the application must be refused.
As such, the following orders will issue:
1.The plaintiff's application to inspect is dismissed.
2.The plaintiff is to pay the subpoenaed plaintiff's costs of the application, to be taxed if not agreed.
3.The defendant's costs of the application shall be in the cause, to be taxed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
DW
Associate to the Honourable Justice Martin7 FEBRUARY 2020
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