Anford Pty Ltd v GCI Properties Pty Ltd & Ors [1999] QSC 358

3746~ SUPREME COURT OF QUEENSLAND REGISTRY: BRISBANE NUMBER: 6355 of 1999 Before Mr Justice Ambrose BETWEEN: AND: AND: AND: ANFORD PTY LTD ACN 010 812 932 GCI PROPERTIES PTY LTD ACN 059 429 248 JOHN HWANG AND EUNCHU HWANG . AS TRUSTEE OF THE JOHN HWANG FAMILY TRUST DAIKYO INTERNATIONAL PTY LTD ACN 010 426 810 Plaintiff First Defendant Second Defendant Third Defendant REASONS FOR JUDGMENT - B. W. AMBROSE J. Delivered the 7th day of December 1999 CATCHWORDS: EVIDENCE - PRIVILEGE - LEGAL PROFESSIONAL - whether file and/or diary notes were made solely for the purpose of giving legal advice to the plaintiff Counsel: Solicitors: Hearing Date: Allen Allen & Hemsley v DCT (1988) 81 ALR 617 Grant v Downs (1976) 135 CLR 674 Packer v DCT (NSW) & Ors [1985]1 Qd R 275 Tickell v Trifleska (1991-92) 24 NSWLR 548 Mr J Sweeney for the plaintiff Mr T Matthews for the first and third defendants Carter Green for the plaintiff Primrose Couper Cronin Rudkin for the first and third defendants 9 November 1999 -- 1 of 13 -- 2 [1] This is an application by the first defendant and the third defendant to test a claim for legal and professional privilege made by the plaintiff with respect to 17 documents. [2] The documents are file and/or diary notes of the former solicitors for the plaintiff recording telephone discussions with a director of the plaintiff confirming events in the course of negotiations for a lease by the plaintiff of part of commercial premises owned by the first defendant and managed by the third defendant. [3] A copy of diary notes of telephone communications with one of the directors of the plaintiff and of two discussions at attendances of one or more of the directors of the plaintiff with a solicitor acting for it have been listed and are described as "instructions from Hirata to Scale or Scale's advice concerning Anford' s proposed lease." At least this is the notation beside 11 of the first 12 diary notes disclosed recording telephone conversations the first being 28 Mayl996 and the last 24 September 1996. There is one recording a conversation at "an attendance". The next 2 diary notes numbered 13 and 14 are described as "instructions from Hirata to Scale or Scale's advice concerning Anford's lease or concerning a proposed new lease", [4] Note numbered 15 is described as "instructions from Hirata to Hickey Lawyers or Hickey Lawyers advice concerning Anford's lease". [5] Documents numbered 16 and 17 are described "instructions from Hirata to Scale or Scale's advice concerning Anford's lease or concerning a proposed new lease". -- 2 of 13 -- 3 [6] Looking at the photostat copies ofthe diary notes it seems clear that Mr Scale was a solicitor employed by Hickey Lawyers, solicitors on the Gold Coast. [7] Although the claim for privilege is made by a director of the plaintiff company no evidence has been called by the plaintiff from Mr Scale who made most ofthe notes or from the author of the two diary notes made 2 September 1998 and 16 November 1998. o [8] The diary notes are rather cryptic in form and upon my examination 15 of them do not suggest that they record legal advice of any kind. There are some diary notes - particularly those numbered 13 of 2 September 1998 and 15 of 16 November 1998 to which I have referred which I have some difficulty in deciphering. o [9] The critical issue in the proceedings pending between the parties involves discussions between agents of the plaintiff and agents of the defendants concerning the inclusion of an option or its equivalent in a lease prepared in 1996. [10] It is the plaintiffs case that agents of the defendants informed a director of the plaintiff that although there would be no option in the lease the plaintiff could be assured that the lease would be extended if the plaintiff so desired - presumably although it is not specifically pleaded - on the same terms and conditions as those in the lease to which the plaintiff and defendants ultimately agreed. [11] The defendants deny ever having given such intimation or undertaking. -- 3 of 13 -- 4 [12] Without the assistance of evidence from the solicitors who made the file/diary notes in respect of which privilege is claimed I am only able to look at their content to see whether on their face they appear to record or are consistent with being associated with legal advice then given by the solicitor for the plaintiff concerning the proposed legal arrangement for a three year lease then in contemplation. [13] In the diary/file notes numbered 1 to 12 between 28 May 1996 and 24 September 1996 I can find nothing even suggesting that they record the giving of any confidential legal advice as to the plaintiffs rights or liabilities which might arise under the terms of the proposed lease then under negotiation. [14] Doing the best I can on the material the diary notes seem to be consistent with the plaintiff using its solicitors to negotiate with the solicitors for the defendants in an attempt to procure for the plaintiffs an option or other advantages in lieu of an option - such as rent free occupation for part of the term ofthe proposed lease. [15] Indeed the second diary note of a conversation on 29 May 1996 is one between the solicitor for the plaintiff and the solicitors for the defendant Gel recording a conversation with those solicitors in the following terms - "No option. Site approved for another 400 rooms. Need ability to relocate. Other matters are OK." [16] Unsurprisingly the claim for privilege was withdrawn with respect to this diary note. -- 4 of 13 -- o 5 [17] If parties to a commercial transaction elect to use a solicitor to negotiate on their behalf the terms of a commercial agreement and that solicitor does so, in my view the commercial relationship between the party and his or her solicitor is merely one of principal and agent insofar as instructions given for those negotiations are concerned and indeed insofar as what is said by the solicitor in the course of those negotiations with the other side is concerned. Although no doubt confidential they cannot be characterized as "legal advice" which attracts legal professional privilege. [18] Of course if advice is given by the solicitor to his client concerning the legal advantages and/or disadvantages or legal consequences of the insertion or deletion of provisions in a proposed lease that would be a matter of confidential legal advice which would be privileged. [l9] On the only material before me the correspondence which passed between the plaintiffs solicitors and the defendant's solicitors concerning draft leases, requests for options, the provision and extent of rental incentives etc which led ultimately to the execution of the lease in final form by the parties could not be subject to the claim of privilege by either party. That correspondence would probably be characterized as ordinary pre-agreement negotiations in communications of a kind which are commonly proved in cases of this sort. In my view such correspondence could be no more the subject of a valid claim for legal professional privilege than could similar correspondence and/or discussions between real estate agents acting for each of the parties in negotiating a lease in terms which eventually prove acceptable to each. -- 5 of 13 -- o 6 [20] In this regard I refer to Tickell v Trifleska (1991-92) 24 NSWLR 548 per Rogers CJ of Comm D at 549, Allen Allen & Hemsley v DCT (NSW) & Ors (1988) 81 ALR 617 at 626-628 per Pincus J and Packer v DCT (1985) I Qd R 275 at 285 per McPherson J. [21] It is clear from Grant v Downs (1976) 135 CLR 674 that the notes to be privileged in this case must have been made solely for the purpose of giving confidential legal advice to the plaintiff. Whatever legal advice may have been given (which on the face of the notes is not in any event recorded) if they were made principally for the purpose of recording instructions to the plaintiffs solicitors to negotiate with the solicitors for the lessor the terms of a commercial lease in my view they are not privileged. [22] I am unpersuaded that document numbered I is privileged. That file note records a telephone discussion between Mr Scale the plaintiffs solicitor and a director of the plaintiff in the following terms - "You want 3 yr option. Rent is OK CPI increase OK Change directors - Tony Hirata - Edward Gang Cheng." [23] In my vIew there is nothing in that diary note to suggest the glvmg of any confidential legal advice. On its face it simply records instructions received from a director of the plaintiff as to the plaintiffs desire to have a 3 year option and its terms, and advising also the identity of directors of the plaintiff - no doubt for the purpose of completing the terms of the formal lease document. -- 6 of 13 -- :) o 7 [24J I have already referred to the content of document numbered 2 which in effect records advice from the solicitors for the defendant lessor that no option would be given and the reason for that decision. [25] Document numbered 3 is a file note of a conversation on 29 May 1996 between the solicitor for the plaintiff and one of its directors. It indicates that the solicitor contacted that director by telephone and advised - "You spoke to Clark & Kann direct. They said no option. You agree to that". I characterise this document in the same way as I have characterised document numbered I. [26] Similarly document numbered 4 is a diary note of an attendance upon the solicitor of directors of the plaintiff on 2 August 1996 in the following terms - "You want exclusive rights to handbags and all rights to sell handbags and all other leather goods. Most important handbag wallets and belts. And figurines. Sign on that basis and don't release documents until that's resolved." I characterise this document as I have characterised document numbered 1. [27] Document numbered 5 of 9 August 1996 is a record of a telephone call from a director of the plaintiff to Mr Scales in these terms- "Discuss matter. I'll do letter to Clark & Kann re some sort of protection for your permitted use." -- 7 of 13 -- o 8 I characterise this document as I have characterised document numbered 1. [28] If a letter was sent to Clark & Kann subsequent to this time concerning "protection for your permitted use", whatever that might mean, undoubtedly the terms of that letter will speak for themselves. [29] In the absence of any evidence from Mr Scales I am unpersuaded that this diary entry records or is connected with any legal advice of a confidential nature given by Mr Scales to the director of the plaintiff or indeed any request made by the director to Mr Scales for such confidential legal advice. [30] Document numbered 6 records a telephone discussion between Mr Scales and a director of the plaintiff on 20 August 1996 in the following terms - "Tell them you want to take shop subject to 3 months rent free." [31] Again in the absence of any evidence from Mr Scales I am unable to see anything on that document to suggest confidential legal advice. If anything to my mind it indicates simply a negotiating point which the plaintiffs solicitors were instructed to undertake - presumably with the solicitors for the defendant/lessor for a rental advantage. [32] Document numbered 7 records a conversation between Mr Scales and a director of the plaintiff on 22 August 1996 in the following terms - "Advised ofletter re permitted use. I am waiting to hear re other area." -- 8 of 13 -- I o 9 [33J Again in my view this does not indicate any confidential legal advice but simply discussions about negotiations that were then being conducted in an open fashion between the solicitors for the proposed lessor and solicitors for the proposed lessee relating to the terms of the leasing arrangement. [34J The next document numbered 8 is a record of a telephone conversation on 22 August 1996 when a director of the plaintiff apparently telephoned Mr Scales. The note reads- "Ring sols tomorrow re the other shop. Need urgent response from them so you can do fitout at same time as renovations that you're doing in Paradise Centre." Tic from K Hirata ( a director of the plaintiff). "You think J Hwang is trying to lease the other shop." [35J I can find no basis to infer from the terms of this document in the absence of any evidence from Mr Scales that it was connected in any way with the seeking or giving of confidential legal advice concerning the proposed lease then being negotiated. [36J The next document, numbered 9 records a telephone conversation on 23 August 1996 between Mr Scales and the director. The note reads - "You spoke to M Jones. Things sound good. I'll follow up sol's. Mention exclusive shoe shop." -- 9 of 13 -- o 10 [37] Again on its face this note simply records discussions concerning final negotiations for the proposed lease. It does not suggest the giving or seeking of any confidential legal advice. [38] The next document, numbered 10 records a conversation between Mr Scales and a director of the plaintiff on 3 September 1996. It reads- "Advised offax from sol's. You want to accept their offer." [39] Presumably the fax from the defendants' solicitors to which reference is made will be admissible. To the extent that the plaintiffs solicitors had been acting for it in the negotiations about the terms of the lease this simply records instructions to accept the offer apparently made by the solicitors for the lessor. It does not suggest on its face the seeking or giving of any confidential legal advice. [40] Document numbered 11 records a telephone conversation between Mr Scales and the director ofthe plaintiff on 13 September 1996 in these terms- "Discuss matter. We'll send lease away on Mon." [41] In the absence of any explanation from Mr Scales I am unable to infer that that record has anything whatever to do with the seeking or giving of legal advice of a confidential nature. [42] Document numbered 12 is a file note of a conversation between Mr Scales and a director of the plaintiff on 24 September 1996 in the following terms- -- 10 of 13 -- o 11 "Advised of estimated commencement date of 10.10.96 with 3 wks rent free. That's still subject to confirmat." [43] In the absence of evidence from Mr Scales I am unpersuaded that that records anything to do with the seeking or giving of legal advice of a confidential kind. [44] With respect to documents numbered 13, 14, 15, 16 and 17 these diary notes were made well after the terms of the lease were finally negotiated and the formal lease documents executed. They were made on 2 September 1998, 16 November 1998, 27 November 1998 and 28 January 1999 respectively. [45] From the amended statement of claim it is the plaintiffs case that there was no indication from the defendant of its intention to resile from an undertaking/representation allegedly given in August 1996 - before execution of the formal lease - prior to II February 1999 - vide clll3, 14;primafacie therefore these diary entries would not relate to advice sought or given concerning this action. [46] The pleadings assert that the lease granted in 1996 expired on 31 May 1999. [47] Document numbered 13 on its face appears to record an attendance by a director of the plaintiff on 2 September 1998 when instructions were given to attempt to negotiate a further 3 year lease with two options to renew for a further 3 years. There is nothing to suggest any seeking or giving of confidential legal advice and I am not assisted by any evidence from the solicitor involved to suggest there was. -- 11 of 13 -- ) ) o 12 [48] The claim for privilege with respect to this document fails. [49] r characterise document numbered 14 in the same way as document numbered 13. The claim for privilege fails for the same reason it failed with respect to that document. [50] Document numbered 15 records a telephone discussion on 16 November 1998 between a director of the plaintiff and its solicitor. On its face it records, inter alia the giving of legal advice albeit not touching (at least directly) issues raised in the pleading. Although r am not assisted by evidence from the solicitor who made that note, it does on its face record that some legal advice was given on that occasion. [51] r hold that the whole of the document is privileged without embarking on a detailed analysis of what parts may arguably be extracted as being not privileged. This document need not be disclosed. [52] Document numbered 16 is a record of a telephone conversation on 27 November 1998. It does not on its face suggest the seeking or giving of any confidential legal advice. There is no evidence from the solicitor involved to suggest that it does. The conversation recorded reads - "Discuss GCl's response to you. r confirm they're not prepared to make a commitment at this time. You'll try to meet with management." r characterise this note as r characterised document numbered 1. The claim for privilege fails. -- 12 of 13 -- 13 [53] With respect to document numbered 17 which is a record of a telephone conversation between a director of the plaintiff and its solicitor dated 28 January 1999, I am again unassisted by any evidence from that solicitor as to whether the note was of a conversation relating to legal advice to or instruction given by that director on matters appertaining to steps that might be taken in the legal interest of the plaintiff. I suspect in any event open correspondence has passed between the solicitors for the parties to the action dealing with the matters recorded as having been discussed. [54] With some hesitation I do not characterise this document as I have document numbered I. It may conceivably record more than instructions ofthe sort contained in document numbered 1 and record legal advice on steps (albeit of a kind commonly taken in circumstances of that kind) that might be taken to safeguard or advance the plaintiffs commercial interests. ~ [55] I uphold the plaintiffs claim for privilege. That document need not be disclosed. o [56] I therefore order that all 17 documents with the exception of documents numbered 15 and 17 be disclosed to the defendant. I hold that documents numbered 15 and 17 are privileged and need not be disclosed. -- 13 of 13 --