Braegrove Pty Ltd v Bendeich [1992] QSC 420 [1993] 2 Qd R 239

TRANSCRIPT OF PROCEEDINGS (Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau.) SUPREME COURT OF QUEENSLAND CHAMBERS .-----------.......-=--== REVISED CCPiSS ISS!.JEIJ . Str.to R0p.or!ing Btireau -, WILLIAMS J '----· ,__ - No 380 of 1992 BRAEGROVE PTY LTD as trustee for the J.A.N. & J. GRAY FAM_ILY TRUST (which ~s misdescribed in the writ of summons herein as the "J.A.N. Gray Family Trust") and as trustee for the GORDON FAMILY TRUST and as truste~ for the BIRKDALE PROPERTY TRUST. First Plaintiff and NATASHA JOY GRAY (an infant) by.her next friend, JOHN ARTHUR NICOL GRAY Second Plaintiff and JOHN ARTHUR NICOL GRAY . and -GRAHAM ROSS BENDEICH and DAWN MAREE FARRINGTON and FEEZ RUTHNING (a firm) and Third Plaintiff First Defendant Second Defendant Third Defendant 1 -- 1 of 15 -- ·-- . I I ,·,.,. PETER JOHN DAVIS and JOHN THOMAS FISHER-STAMP and KN'rGHT FERRIER HODGSON (a firm) and between: FEEZ RUTHNING (a firm) and Fourth Defendant Fifth Defendant Sixth Defendant Plaintiff by Count_erclaim BRAEGROVE PTY LTD as trustee for the J.A.N. & J. GRAY FAMILY TRUST and as trustee for the GORDON FAMILY TRUST and as 1 10 trustee for the BIRKDALE PROPERTY TRUST ~ First Defendant by Counterclaim and NATASHA JOY GRAY (an infant) by her next friend, JOHN ARTHUR NICOL GRAY and JOHN ARTHUR NICOL GRAY and JOY GRAY BRISBANE .. DATE 16/12/92 .. JUDGMENT 2 Second Defendant by Counterclaim 30 Third Defe·ndantby Counterclaim Fourth Defendant by Counterclaim ~ 50 60 -- 2 of 15 -- ') 161292 HIS HONOUR: I have prepared reasons for judgment which I publish. I am ordering that a further affidavit of documents be filed and served. I order that the respondent make, file and serve a further affidavit of documents by 5.00 p.m. on 4 January 1993. 10 I order that the responderit pay the applicant's taxed costs of ~ and incidental to the application. 30 40 50 60 JUDGMENT 3 -- 3 of 15 -- :--1~ \ I ' ' - - - - IN THE SUPREME COURT OF QUEENSLAND Before the Hon. Mr Justice Williams BETWEEN: No. 380 of 1992 BRAEGROVE PTY LTD as trustee for the J.A.N. & J. GRAY FAMILY TRUST [which is misdescribed in the writ of summons herein as the "J.A.N. Gray Family Trust"] and as trusteefor the GORDON FAMILY TRUST and as trustee for the BIRKDALE PROPERTY TRUST First Plaintiff AND: NATASHA JOY GRAY (an infant) by her next friend, JOHN ARTHUR NICOL GRAY Second Plaintiff AND: JOHN ARTHUR NICOL GRAY Third Plaintiff AND: GRAHAM ROSS BENDEICH First Defendant AND: DAWN MAREE FARRINGTON Second Defendant AND: FEEZ RUTHNING (a firm) Third Defendant AND: PETER JOHN DAVIS Fourth Defendant AND: JOHN THOMAS FISHER-STAMP Fifth Defendant AND: KNIGHT FERRIER HODGSON (a firm) Sixth Defendant -- 4 of 15 -- - AND BETWEEN: FEEZ RUTHNING (a firm) Plaintiff by Counterclaim BRAEGROVE PTY LTD as trustee for the J.A.N. & J. GRAY FAMILY TRUST and as trustee for the GORDON FAMILY TRUST and as trustee for the BIRKDALE PROPERTY TRUST First Defendant by Counterclaim NATASHA JOY GRAY (an infant) by her next friend, JOHN ARTHUR NICOL GRAY Second Defendant by Counterclaim AND: JOHN ARTHUR NICOL GRAY Third Defendant by Counterclaim AND: JOY GRAY Fourth Defendant by Counterclaim DRAFT JUDGMENT - WILLIAMS J., Delivered the 16th day of December, 1992 CATCHWORDS: Practice - discovery - · O. 35 r. 12 - documents subject to a claim of privilege should be described so as to be individually identified. Counsel: Solicitors: Varitimos for applicants Morris for respondent Lynch and Company for applicants Corrs Chambers Westgarth for respondent Hearing date: 11th November, 1992 -- 5 of 15 -- --... --.. '-._./ 'l IN THE SUPREME COURT OF QUEENSLAND BETWEEN: No. 380 of 1992 BRAEGROVE PTY LTD as trustee for the J.A.N. & J. GRAY FAMILY TRUST [which is misdescribed in the-writ of summons herein as the "J.A.N. Gray Family Trust"] and as trustee for the GORDON FAMILY TRUST and as trustee for the BIRKDALE PROPERTY TRUST AND: AND: AND: AND: AND: AND: First Plaintiff NATASHA JOY GRAY (an infant) by her next friend, JOHN ARTHUR NICOL GRAY Second Plaintiff JOHN ARTHUR NICOL GRAY Third Plaintiff GRAHAM ROSS BENDEICH First Defendant DAWN MAREE FARRINGTON Second Defendant FEEZ RUTHNING ( a firm) Third Defendant PETER JOHN DAVIS Fourth Defendant JOHN THOMAS FISHER-STAMP Fifth Defendant KNIGHT FERRIER HODGSON (a firm) Sixth Defendant -- 6 of 15 -- - - AND BETWEEN: AND: AND: FEEZ RUTHNING (a firm) Plaintiff by Counterclaim BRAEGROVE PTY LTD as trustee for the J.A.N. & J. GRAY FAMILY TRUST and as trustee for the GORDON FAMILY TRUST and as trustee for the BIRKDALE PROPERTY TRUST First Defendant by Counterclaim NATASHA JOY GRAY (an infant) by her next friend, JOHN ARTHUR NICOL GRAY Second Defendant by Counterclaim JOHN ARTHUR NICOL GRAY Third Defendant by Counterclaim JOY GRAY Fourth Defendant by Counterclaim DRAFT JUDGMENT - WILLIAMS J. Delivered the 16th day of December, 1992 This is an application brought by the plaintiffs in the action that the respondent (third defendant in the action) file and serve a further affidavit of documents "describing the documents contained in Schedule 1 Part 2 sufficiently to enable such documents to be identified." It is desirable that I say something about the action, but it is complex and the following matters, though relevant for present purposes, could be misleading if not read in the context of the totality of the pleadings. The respondent is a -- 7 of 15 -- _ 2 firm of solicitors. The sixth defendant is a firm of chartered accountants; the first and second defendants are partners therein. One D.L. Clout was also a partner in the sixth defendant at all material times. On 7th April, 1989 the third plaintiff and his wife, Joy Gray, became bankrupt by force of s. 55 of the Bankruptcy Act 1966 and Clout was appointed trustee of each of their respective estates in bankruptcy. It is alleged in the statement of claim that the respondent at material times acted as solicitors for the trustee in bankruptcy, for the first defendant, for the second defendant, and for the first plaintiff. Then so far as is relevant the statement of claim alleges (para. 54) that the respondent was knowingly involved in breaches of trust by the first defendant, the second. defendant, the first plaintiff, and the sixth defendant. Associated with that is the allegation in para. 36 of the statement of claim that the trustee in bankruptcy informed the , 1 __ third plaintiff of · details of legal advice he had received ~- (from the respondent - para. 44) with respect to matters pertaining to the administration of the estates. It is also alleged in para. 59 that the respondent failed to protect the rights of the first plaintiff and that such failure amounted to either breach of the contract of retainer or negligence. Finally the allegation is made in para. 60 that the respondent was in breach of the fiduciary duty it owed to the first plaintiff in that it was in a position of conflict of interest because of the contemporaneous retainers. -- 8 of 15 -- 3· That brief summary is sufficient -to make it clear that the action, so far as it involves the respondent, is very much about the giving, or failing to give, appropriate legal advice. All the relevant persons to whom the respondent gave legal advice are parties to the action, except Clout; but as he was a partner of the sixth defendant in some instances it may be arguable that the advice was given to the firm and not him personally. The affidavit of documents on behalf of the respondent was sworn to by A. J. Wilson. In Schedule 1 Part 1 624 documents are described. There are a number of letters described therein as passing between the respondent and Knight Ferrier Hodgson, but none described as letters to or from the trustee, Clout. Paragraph . 3 of the affidavit of documents is in the following terms: "The · third defendant objects to produce documents set forth in Part · 2 of the said Schedule 1 on the ground that such documents are privileged from production for the reasons that the documents consist solely -of professional communications of a confidential nature which, for the purpose of obtaining legal advice, have passed between the third defen.dant and its solicitors and agents and counsel acting on its behalf and reports and - memoranda m_p.de either in anticipation of or during the progress of this action for the use of its solicitors to enable them to conduct the said action and to advise it in reference thereto." Schedule 1 Part 2 then states as follows: "1. Professional communications of a confidential nature made by the third defendant firm to its solicitors and to the third defendant firm by its solicitors. 2. Instructions to and advice from counsel in relation to this action. //: ;, . C -- 9 of 15 -- 4 3. Documents brought into existence in anticipation of or during the progress of this action. 4. Advice given by the third defendant ·firm to David Clout." The obligation imposed by O. 35 r. 12 upon a party making discovery is to "enumerate the documents in a convenient order and as shortly as possible, describing each of them or, in the case of bundles of documents of the same nature, each bundle, sufficiently to enable it to be identified". It is the essential contention of the applicants that the affidavit of documents in question fails to enumerate those documents in respect of which a claim of privilege is made; it is said that each document should be so described as to enable it to be identified. The point is made that Schedule 1 Part 2 effectively only summarises matters deposed to in para. 3 of the body of the affidavit. The reasons of Cotton L.J. in delivering the judgment of the Court of Appeal (Bramwell and Brett L .JJ. concurring) in Taylor v. Batten (1878) 4 Q.B.D. 85 still provide the clearest ~ exposition of the· obligation upon a party making discovery of documents to identify documents subject to a claim of privilege. The initial affidavit in that case referred to "certain documents, letters, and correspondence, which have passed between my legal advisers and myself . and certain ',. instructions to and opinions of counsel in relation to the same matters . 11 Cotton L .J. observed that such was "clearly insufficient" because it used the description "certain" documents without any further identification. What, in his view, the Court required where there was no question of -- 10 of 15 -- 5 privilege or objection to produce the documents was that "they should be so far identified, that the Court c~n see that the documents referred to are produced if required. 11 He then considered whether there was any further identification required where there was an objection to produce the documents. Relevantly he said at 88: "The · affidavit is sufficient if the documents are sufficiently identified. But it is said that the plaintiffs are entitled to·be put in such a position as to test the truth of the affidavit by the description of the documents. That, however, is, in our ·opinion, erroneous. The only object of the affidavit is to enable the Court to order the documents to be produced, if it thinks fit to make an order to that effect; and if words are used which, if true, protect the documents, no further particularity is necessary than in the case of documents for which protection is not claimed." A Court of Appeal, similarly comprised, considered a similar question in Gardner v. Irvin (1878) L.R. 4 Ex. D 49. The only passage of significance for present purposes is the .. observation of Cotton L.J. at 53 that "the plaintiffs are not ,, ,' C entitled to have the dates of the letters and such other particulars of the correspondence as may enable them to discover indirectly the contents of the letters, and thus to C cause the defendants to furnish evidence against themselves in this action." Those decisions were recently followed and applied by Demack J. in his unreported decision in Wedmaier and Others v. Meldrum and Lawton ( Rockhampton No. 2 7 of 1 9 9 0, j udgmen t delivered 9th September, 1991). Paragraph 3 of the body of the affidavit in that case was remarkably similar ·to para. 3 in Wilson's affidavit, and the same format was used for referring to documents in Schedule 1 Part 2. His Honour said -- 11 of 15 -- ' .. ' ' ... \) 6 that "the present form of the second part of the first Schedule does not sufficiently identify the documents as that concept was explained by Cotton L.J. The supplementary description raises the existence of. a number of documents not in any way identifiable, and some of which-may not meet the sole test rule." Reference can also be made to the reasoning of White J. (with whom King C.J. and Millhouse J. agreed) in Kadlunga Proprietors and Others v. Electricity Trust of South Australia and Others (1985) 39 S.A.S.R. 410. He said at 415 that what is "required in properly describing discovered documents will vary from case to case depending on ·the nature of the document and the particular ground of privilege claimed." He also said at 416 that unless "the date of the document is disclosed, there is virtually no way of testing whether it could reasonably come within the relevant limb of legal professional privilege". Whilst I would generally agree with that latter observation, the remarks of Cotton L.J. in Gardner referred to above must not be overlooked. If in any particular case ~- giving the date of the privileged document would effectively defeat that claim then the date need not be disclosed. Insofar as the reasoning of White J. goes so far as to say that the opposite party is entitled to such a description that would enable it to form a prima facie view as to the correctness of the claim of privilege then it ought not be followed; in that regard the decision in Taylor v. Batten is to be preferred. I agree with the observations made by _the Full Court of Tasmania on that reasoning in Kadlunga (Lazenby -- 12 of 15 -- / 7 v. Zammit (1987) Tas.R. 54). Green C.J; and Wright J. in the latter case concluded at 57 that: " ... the description of a.document would be quite insufficient . . . if it is so lacking in particularity that the intervention of a party, or his solicitor or some other person, is necessary in order to provide supplementary information about the list or the document before the document is capable of being· identified. Applying this test to the present facts, it seems to us that the respondent's description of the medical reports is deficient. The dates of the reports are not given, nor does the list say how many such reports are in existence. If the respondent were directed to produce the docu~ents for inspection and (say) three medical reports were produced, it would be quite impossible to say if these were the only reports referred to . In our opinion, some greater particularity is required before .:it can be said that the. respondent has complied with r. 16." I agree entirely with those observations. In this case the reference in general terms to various categories of allegedly privileged documents_ is wholly unacceptable. The position is even more acute in this case which is essentially concerned with the giving of, or failure to give, appropriate legal advice. " .' ' ... If one goes to item 2 - instructions to and advice from counsel in relation to this action - there may be an extremely r fine line between instructions to and advices from counsel relating to matters which are the subject of the litigation arid instructions to and advice from counsel in relation to the very litigation itself. Given the brief analys1s of this proceeding set out earlier, there may be no privilege which can be maintained with respect to the former, whilst the latter may well attract such protection. A similar observation could be made with respect to item 3 - there may be a very significant distinction between documents brought -- 13 of 15 -- 8 into existence in anticipation of the action and documents brought into existence during the progress of the action. It may be the same with respect to item 4 - advice given to Clout. Given what has been said previously with respect to correspondence between the respondent and the s~xth defendant, there may or may not be any significance in the claim that this advice was given to Clout rather than to the sixth defendant. . The advice ref erred to may encompass the very advice referred to in paras. 36, 44, and 54. Given the overall state of the pleadings, it may well be arguable that such advice can no longer be made the subject of a claim for privilege. To enable all of those matters to be properly considered it is necessary that the documents subject to a claim of privilege be described with more particularity; at least with such particularity as would meet the requirements of O. 35 ---.. r. 12. Given the circumstances here, most, if not all, should be individually identified. - There are other possible criticisms which could be levelled at the descriptions presently found of Schedule 1 Part 2 here, but it seems to me undesirable to take those matters further. I have demonstrated why there is, in my view, an obvious failure to meet the requirements imposed on the respondent and it follows that there must be a further affidavit delivered. However it is worth noting some problems with respect to para. 3 of the body of the affidavit. In that regard the judgment of Demack J. in Wedmaier should not be overlooked. -- 14 of 15 -- 9 The paragraph consists of only one sentence, and it is rather unwieldy. However it seems to me that it is at least arguable that in referring to "reports and memoranda" it does not raise the "sole purpose" test required by Grant v. Downs (1976) 135 C.L.R. 674. Further, paragraph 3 of the body of the affidavit makes a claim for privilege under a variety of heads not all of which could apply to all of the documents particularised in Schedule 1 Part 1. For example, advice given to Clout could not be protected upon the basis that it was a report or memoranda made in anticipation of or during the progress of the action for the use of the respondent's solicitors to enable them to conduct the action and to advise the respondent in relation thereto. That merely highlights the fact that the claim of privilege is in a totally unacceptable form. It follows that the application must succeed and the respondent should make, file and serve a further affidavit of documents. I will so order and order the respondent to pay the taxed costs of the application. C -- 15 of 15 --