Creswick & Ors v Creswick [2009] QSC 219

SUPREME COURT OF QUEENSLAND CITATION: Creswick & Ors v Creswick [2009] QSC 219 PARTIES: JOHN FRANCIS CRESWICK & OTHERS (plaintiffs by claim) v FELIX ANTONIO CRESWICK (defendant by claim) FELIX ANTONIO CRESWICK (plaintiff by counterclaim) v JOHN FRANCIS CRESWICK & OTHERS (defendants by counterclaim) FELIX ANTONIO CRESWICK (applicant) v JOHN REDMOND MOTT (respondent) FILE NO: 10963 of 2009 DIVISION: Trial Division PROCEEDING: Application ORIGINATING COURT: Supreme Court of Queensland DELIVERED ON: 7 August 2009 DELIVERED AT: Brisbane HEARING DATE: 21 April 2009 JUDGE: Daubney J ORDER: 1. The stay on the notice of non-party disclosure directed to Mr Mott is lifted only in respect of those documents on his file which were created, or are dated, in the period 25 May 2007 – 28 May 2007 (inclusive); 2. The documents referred to in Order 1 be produced for inspection within seven days; 3. Mr Mott’s objection to production of documents on his file is otherwise -- 1 of 18 -- 2 upheld; 4. Each party pay its own costs of and incidental to this application. CATCHWORDS: PROCEDURE – DISCOVERY AND INTERROGATORIES – DISCOVERY AND INSPECTION OF DOCUMENTS – PRODUCTION AND INSPECTION –GENERALLY – DOCUMENTS IN POSSESSION OF PERSON NOT A PARTY – where the defendant issued a notice of non-party disclosure to the plaintiff’s former solicitor seeking the production of a particular file of documents – where the entire file relating to the negotiations culminating in the preparation of an agreement between the parties was sought– where the plaintiff’s former solicitor objected to producing the file on the basis it that many of the documents on the file were not directly relevant to an allegation in issue in the pleadings and were subject to legal professional privilege – whether the documents were protected by privilege – whether there had been an implied waiver of privilege Uniform Civil Procedure Rules 1999 (Qld) Ampolex v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405, applied AWB v Cole (No 5) (2006) 155 FCR 30, applied Dalleagles Pty Ltd v ASC (1991) 4 WAR 325, applied Daniels Corporation v ACCC (2002) 213 CLR 543, considered DSE (Holdings) Pty Ltd v InterTAN Inc [2003] FCA 1191, considered Osland v Secretary, Department for Justice (2008) 234 CLR 275, considered COUNSEL: L Kelly SC with J Otto for the applicant/defendant P Morrison QC with K Howe for the respondent (Mr Mott) SOLICITORS: Hopgood Ganim Lawyers for the for the applicant/defendant DLA Phillips Fox for the for the respondent (Mr Mott) [1] On 6 March 2009 the defendant issued a notice of non-party disclosure to the first plaintiff’s former solicitor, John Redmond Mott, seeking the production of a particular file of documents. -- 2 of 18 -- 3 [2] By a letter to the defendant’s solicitors dated 16 March 2009, Mr Mott took issue with whether personal service of the notice had been effected on him. The contention that service was deficient was not pursued before me in this application. Relevantly for present purposes, Mr Mott’s letter stated: “The Notice requests that I produce my entire May Agreement file. Pursuant to Rule 245 of the Uniform Civil Procedure Rules 1999, I object to producing my May Agreement file on the basis that it is privileged. Privilege is claimed over the entire “May Agreement” file since it was prepared for the dominant purpose of giving legal advice to my then client and for the purposes of providing my client with legal services pertinent to the preparation of an agreement pursuant to my instructions.” [3] The defendant has applied pursuant to UCPR r 247 for a decision about the objection, and seeks production of the file. [4] In order to understand the potential relevance of the contents of this file, it is necessary to say something about the principal proceeding which, as might be gleaned from the Court heading, is a heated dispute between members of the Creswick family, of which the defendant is paterfamilias. [5] One of the central claims in the principal proceeding turns on a written agreement dated 26 May 2007 (“the May 2007 agreement”) between the defendant and the first, second, third and fourth plaintiffs (who are the defendant’s sons and their wives). It is pleaded in paragraph 15 of the fourth amended statement of claim (4ASOC) that the May 2007 agreement was entered into “to give effect to the transfer of certain interests ... in the Holland Park properties, the Seahaven Court property and the Sentinel Court property” (those property reference are further defined elsewhere in the pleading). The 4ASOC sets out as some length the terms of the May 2007 agreement, as executed, and pleads: -- 3 of 18 -- 4 “18. As at 26 May 2007 each of the First to Fourth Plaintiffs (on the one hand) and the Defendant (on the other hand) meant and intended that: (a) the reference to “905 Logan Road” in the 26 May 2007 Agreement was a reference to the Holland Park properties and the Crump Street properties; (b) in Schedule 1 thereof the list of property descriptions in respect of 905 Logan Road should include the property descriptions for the Crump Street properties, namely Lots 33 and 34 on RP 38083, Title references 12113180 and 12113248. 19. By mistake the property descriptions of the Crump Street Properties were omitted from Item 3 of Schedule 1 of the 26 May 2007 Agreement. 20. In the premises, the 26 May 2007 Agreement ought to be rectified to include, in Item 3 of Schedule 1, the property descriptions of the Crump Street properties, namely “Lots 33 and 34 on RP 38083, Title references 12113180 and 12113248”. 21. The true meaning and effect of the Agreement was, inter alia, that: (a) the Holland Park properties and the Crump Street properties were to be transferred from the name of the Defendant, to the Defendant, the First Plaintiff and the Second Plaintiff as to a 1/3 interest each as tenants-in-common; (b) the Sentinel Court property was to be transferred from the name of the Defendant to the Second Plaintiff and Fourth Plaintiff. (c) the Seahaven Court property was to be transferred from the names of the First Plaintiff and Third Plaintiffs to the Defendant and the Third Plaintiff as joint tenants; (d) at completion, the First Plaintiff and Second Plaintiff would pay to the Defendant the sum of $600,000.00; (e) at completion, the First Plaintiff and Second Plaintiff would pay to the Defendant a regular weekly sum of $1,250.00 for the term of his natural life.” [6] The 4ASOC then asserts a repudiation of the agreement by the defendant, before going on to plead at length the further alternative cases which the plaintiffs will seek to mount at trial, that the defendant holds his interest in the various properties on trust for the plaintiffs (in various combinations). In the prayer for relief, the first, second, third and fourth plaintiffs relevantly claim for: “1. Rectification of the 26 May Agreement by adding, in Item 3 of Schedule 1, the property descriptions of the Crump Street properties, -- 4 of 18 -- 5 namely “Lots 33 and 34 on RP 38083, Title references 12113180 and 12113248”. 2. A declaration that the 26 May Agreement continues to bind the First to Fourth Plaintiffs and the Defendant. 3. An order whereby it is adjudged that the 26 May Agreement ought be specifically enforced. 4. A declaration that the First to Fourth Plaintiffs have an interest in the Holland Park properties, the Sentinel Court property and the Seahaven Court property in accordance with the terms of the 26 May Agreement. 5. Costs. 6. Such further or other orders as may be necessary.” [7] In a lengthy (205 pages) defence and counter-claim, the defendant narrates his version of the dealings by which the various properties were acquired, the financial arrangements between the parties, and the circumstances under which the properties are presently held. In relation to the execution of the May 2007 agreement, he pleads, in brief, being contacted by and subsequently meeting with a real estate agent (asserted to be the first plaintiff’s agent) who told the defendant, amongst other things, that the first and second plaintiffs were in trouble, that a finance house was about to foreclose on them, that they needed the defendant’s help, and that they wanted the defendant to give a guarantee to the finance house. It is said that this agent took the defendant to Mr Mott’s office, and that Mr Mott gave the defendant some documents and asked him whether he had a solicitor, to which the defendant replied that he did not. It is pleaded that the agent then took the defendant to another solicitor’s office and put pressure on the defendant to sign the documents, despite this solicitor’s protest that he wanted to review the documents over the weekend and that he was not happy about the pressure being put on the defendant to sign the documents. It is said that the defendant was on medication, unwell, and anxious, but the agent insisted forcibly that the documents be signed otherwise the -- 5 of 18 -- 6 sons would go broke, and that in those circumstances the defendant executed the May 2007 agreement. These pleadings give rise to claims by the defendant that the May 2007 agreement ought be rescinded by him as of right, or by law for duress, fraudulent misrepresentation, undue influence, unconscientious dealing, or for non- compliance with the Property Agents and Motor Dealers Act 2000 (Qld). [8] In relation to the plaintiffs’ rectification case, the defendant denies an entitlement to rectification of the May 2007 agreement, pleading, amongst other things, that: (a) The May 2007 agreement was drafted by the first plaintiff’s solicitor, Mr Mott, on instructions given to him by the first plaintiff, and (b) The May 2007 agreement records the instructions given to Mr Mott by the first plaintiff. [9] The notice of non-party disclosure issued to Mr Mott sought disclosure of: “ No Date Description 1. Various The entire file relating to the negotiations culminating in and the preparation of the May agreement, including but not limited to all correspondence, documents (including drafts), file notes, memos and attendance records ” [10] Rule 242(1) provides: “(1) A party (the applicant) to a proceeding may by notice of non-party disclosure require a person who is not party to the proceeding (the respondent) to produce to the applicant, within 14 days after service of the notice on the respondent, a document – (a) directly relevant to an allegation in issue in the pleadings; and (b) in the possession or under the control of the respondent; and (c) that is a document the respondent could be required to produce at the trial of the matter.” [11] Rule 245 allows a person served with, or who may be affected by, such a notice to object to producing documents. Rule 245(3) sets out the matters which need to be -- 6 of 18 -- 7 stated in such an objection, one of which is that the objector must “clearly state the reasons for the objections” (r 245(3)(d)). Rule 247 permits an application such as the present one to be brought for the Court to make a decision about the objection. [12] In resisting the present application, the respondent mounted two arguments: (a) That many of the documents on the file were not directly relevant to an allegation in issue in the pleadings, and (b) Such documents on the file as might be directly relevant were protected by legal professional privilege. [13] At the request of the parties I have perused Mr Mott’s file. It seems to me that the documents on the file fall into two distinct classes: (a) Many of the documents on the file are not, it seems to me, directly relevant to any of the allegations in issue between the parties (as outlined above); and (b) There are numerous documents which were obviously created in the timeframe proximate to the preparation and execution of the May 2007 agreement recording such matters as instructions given to Mr Mott for preparation of the agreement, Mr Mott’s notes in respect of drafting the agreement, and similar. Absent a claim of legal professional privilege, these documents would, in my view, be disclosable. [14] The defendant objected to Mr Mott’s counsel relying on relevance as a ground of opposition to production, pointing out that relevance was not cited as one of the reasons stated in Mr Mott’s objection under r 245. True it is that this ground was not explicitly raised in Mr Motts’ formal objection, but I would be disinclined to refuse to allow Mr Mott to raise that objection now for these reasons: (a) It is clear that the only documents which the recipient of a notice for third party disclosure can be required to disclose are those which are “directly relevant to an allegation in issue in the pleadings:” r 242(1)(a). It would, in my view, be wholly unjust for a party to obtain disclosure of documents beyond the permitted purview of r 242(1)(a) by reason only of a failure to state what might be regarded as an obvious objection, i.e. that the recipient objects to producing documents which are not on any view required to be produced; -- 7 of 18 -- 8 (b) It cannot be said that the defendant has suffered any prejudice by reason of the point not having been taken in the objection letter but raised in the hearing of this application; and (c) In any event, the notice of non-party disclosure, on its face, goes only to the entirety of the file “relating to the negotiations culminating in and the preparation of the May agreement.” I would not construe that request for disclosure as extending to any documents on the file beyond the entirety of that specified part of the file. [15] That leaves for consideration, then, the second class of documents on the file, being those which are relevant but over which Mr Mott asserts the protection of legal professional privilege. [16] In seeking to set up the claim for privilege, Mr Mott has deposed to the following: “7. I claimed that the “May agreement file” was privileged, firstly upon the basis of professional legal advice and secondly upon the basis that, apart form the “May agreement”, which is already in evidence, the content of my file contained material reflecting or evidencing communications between myself and my client John Creswick, discussions in relation to matters germane to the “May agreement” and advice in relation to all of the matters involved in the preparation and drawing of that agreement. 8. In relation to the content of the “May agreement” file I have never taken instructions from any person other than John Francis Creswick. 9. I was instructed to draw the May agreement in the abstract to be applied to and in circumstances which were not known to me at the time and of which I had little or no knowledge. 10. To the best of my recollection I had never spoken to Felix Creswick until the afternoon of 26 May 2007 when one Tom Banjanin called at my office to collect the draft of the “May agreement” in duplicate. 11. Tom Banjanin was accompanied by a gentleman whom I did not know. Tom Banjanin formally introduce this gentleman to me as Felix Creswick. 12. The drafts of the “May agreement” were still in the final stages of preparation when Tom Banjanin called at my office. Tom Banjanin and Felix Creswick waited in my reception area pending the completion of the drafts of the “May agreement”. 13. On delivery of the draft documentation to Tom Banjanin, both he and Felix Creswick left my waiting room. As both persons were leaving, I said to Felix Creswick, “Do you have legal representation?” He replied, “You will look after me?” -- 8 of 18 -- 9 14. I responded that I could not and would not act in any manner which might protect the interests of Felix Creswick as I acted for John Creswick. Nothing further was said. Both Tom Banjanin and Felix Creswick left my reception area. 15. I have never received nor have I ever taken instructions form Felix Creswick in respect of the May Agreement matter. 16. The so called “May agreement file” contains material which pre-dates the drawing of the “May agreement” and is, in my opinion, not directly relevant to the “May agreement” or the matters before this Court.” [17] In Daniels Corporation v ACCC1 Gleeson CJ, Gaudron, Gummow and Hayne JJ said:2 “It is now settled that legal professional privilege is a rule of substantive law ... which may be availed of by a person to resist the giving of information or the production of documents which would reveal communications between a client and his or her lawyer made for the dominant purpose of giving or obtaining legal advice or the provision of legal services, including representation in legal proceedings.” [18] In this case, the particular type of legal professional privilege invoked is that which is generally known as “advice privilege”. In AWB Ltd v Cole (No 5),3 Young J summarised many of the relevant general principles which need to be applied in cases in which advice privilege is claimed, including the following4 : “(1) The party claiming privilege carries the onus of proving that the communication was undertaken, or the document was brought into existence, for the dominant purpose of giving or obtaining legal advice. The onus might be discharged by evidence as to the circumstances and context in which the communications occurred or the documents were brought into existence, or by evidence as to the purposes of the person who made the communication, or authored the document, or procured its creation. It might also be discharged by reference to the nature of the documents, supported by argument or submissions: see Grant v Downs (1976) 135 CLR 674 at 689; Commissioner of Taxation (Cth) v Pratt Holdings Pty Ltd (2005) 60 ATR 466 at [30]; and AWB v Cole at [63]. (2) The purpose for which a document is brought into existence is a question of fact that must be determined objectively. Evidence of the intention of the document’s maker, or of the person who 1 (2002) 213 CLR 543. 2 At [9]. 3 (2006) 155 FCR 30. 4 At [44] -- 9 of 18 -- 10 authorised or procured, it, is not necessarily conclusive. It may be necessary to examine the evidence concerning the purpose of other persons involved in the hierarchy of decision-making or consultation that led to the creation of the document and its subsequent communication: see AWB v Cole at [110]. (3) The existence of legal professional privilege is not established merely by the use of verbal formula: Grant v Downs at 689 per Stephen, Mason and Murphy JJ. Nor is a claim of privilege established by mere assertion that privilege applies to particular communications or that communications are undertaken for the purpose of obtaining or giving “legal advice”: National Crime Authority v S (1991) 29 FCR 203 at 211-212 per Lockhart J; Candacal Pty Ltd v Industry Research and Development Board (2005) 59 ATR 615; 223 ALR 284 at [70]: Seven Network Ltd v News Ltd [2005] FCA 142 at [6]-[8]. If assertions of that kind are received in evidence in support of the privilege claim, their conclusionary nature can leave unclear what advice was really being sought. There will be cases in which a claim of privilege will not be sustainable in the absence of evidence identifying the circumstances in which the relevant communication took place and the topics to which the instructions or advice were directed: Kennedy v Wallace (2004) 142 FCR 185 (Kennedy v Wallace) at [12]-[17] per Black CJ and Emmett J and [144]-[145] and [166]- [171] per Allsop J: see also Southern Equities Corp Ltd (in liq) v Arthur Andersen & Co (No 6) [2001] SASC 398. ... (5) A “dominant purpose” is one that predominates over other purposes; it is the prevailing or paramount purpose: AWB v Cole at [105]-[106]; Commissioner of Taxation (Cth) v Pratt Holdings at [30] per Kenny J. (6) An appropriate starting point when applying the dominant purpose test is to ask what was the intended use or uses of the document which accounted for it being brought into existence: Pratt Holdings Pty Ltd v Commissioner of Taxation (2004) 136 FCR 357 at [35] per Finn J. (7) The concept of legal advice is fairly wide. It extends to professional advice as to what a party should prudently or sensibly do in the relevant legal context; but it does not extend to advice that is purely commercial or of a public relations character: Balabel v Air India [1988] Ch 317 at 323 and 330; Nederlandse Reassurantie Groep Holding NV v Bacon & Woodrow [1995] 1 All ER 976 at 983; Three Rivers District Council v Governor and Company of Bank of England (No 6) [2005] 1 AC 610 at [43]-[44], [59]-[60], [114] and [120]; Dalleagles Pty Ltd v Australian Securities Commission (1991) 4 WAR 325 at 332-333; DSE (Holdings) Pty Ltd v InterTAN Inc (2003) 135 FCR 151 at [25]-[71]; and AWB v Cole at [100]-[101]. (8) Legal professional privilege protects the disclosure of documents that record legal work carried out by the lawyer for the benefit of the client, such as research memoranda, collations and summaries -- 10 of 18 -- 11 of documents, chronologies and the like, whether or not they are actually provided to the client: Daniels at [44] per McHugh J; Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 550 per McHugh J (Propend); Dalleagles at 333-334 per Anderson J; Trade Practices Commission v Sterling (1979) 36 FLR 244 at 245-246 per Lockhart J (Sterling); and Kennedy v Lyell (1883) 23 Ch D 387 at 407; Lyell v Kennedy (No 3) (1884) 27 Ch D 1 at 31 per Bowen LJ; Propend Finance Pty Ltd v Commissioner of Australian Federal Police (1995) 58 FCR 224 per Lindgren J. (9) Subject to meeting the dominant purpose test, legal professional privilege extends to notes, memoranda or other documents made by officers or employees of the client that relate to information sought by the client’s legal adviser to enable him or her to advise: Sterling at 246. The privilege extends to drafts, notes and other material brought into existence by the client for the purpose of communication to the lawyer, whether or not they are themselves actually communicated to the lawyer: Saunders v Commissioner of Australian Federal Police (1998) 160 ALR 469 at 472. ... (11) Legal professional privilege protects communications rather than documents, as the test for privilege is anchored to the purpose for which the document was brought into existence. Consequently, legal professional privilege can attach to copies of non-privileged documents if the purpose of bringing the copy into existence satisfied the dominant purpose test: Propend at 507 per Brennan CJ, 544 per Gaudron J, 553-554 per McHugh J, 571-572 per Gummow J, and 587 per Kirby J. In Propend at 512, Brennan CJ added a qualification to this principle: if an original unprivileged document is not in existence or its location is not disclosed or is not accessible to the persons seeking to execute the warrant, and if no unprivileged copy or other admissible evidence is made available to prove the contents of the original, the otherwise privileged copy loses its protection. (12) The Court has power to examine documents over which legal professional privilege is claimed. Where there is a disputed claim the High Court has said that the court should not be hesitant to exercise such a power: Esso; see also Grant v Downs at 689. If the power is exercised, the court will need to recognise that it does not have the benefit of submissions or evidence that might place the document in its proper context. The essential purpose of such an inspection is to determine whether, on its face, the nature and content of the document supports the claim for legal professional privilege.” [19] Despite criticisms levelled by counsel for the defendant at the adequacy of Mr Mott’s affidavit, it seems to me that his evidence is considerably more than “the traditional, but reprehensible, practice of parties making an affidavit of documents -- 11 of 18 -- 12 baldly asserting that the privileged purpose was the dominant purpose for which the document was brought into existence”. 5 Indeed, in his affidavit Mr Mott eschews swearing the issue by such an impermissible assertion in favour of deposing to the matters stated in paragraphs 7, 8 and 9 of his affidavit which, in my view, are sufficient evidence of the requisite dominant purpose. That view was reinforced by my perusal of the documents in question. [20] Counsel for the defendant also urged me to adopt a narrow view of the documents over which advice privilege might be claimed, submitting that: (a) Records of discussions as to the nature of an agreement to be documented, as having been agreed between the parties, does not satisfy the privilege test; and (b) Neither the plaintiffs nor Mr Mott have specifically identified the particular advice sought or given. [21] The answer to the notion that I should adopt such a narrow approach is, I think, found in the following passage from the judgment of Anderson J in Dalleagles Pty Ltd v ASC6 which, whilst lengthy, is worth setting out in full: “I do not think the authorities provide justification for concluding that the doctrine of legal professional privilege as applying to non-curial communications between solicitor and client has been refined to the extent submitted by counsel for the defendants, which would require professional communications to be excluded from the protection of privilege unless expressed as advice simpliciter or as a request for such advice or unless forming part of a communication expressed in that way. But anyway, I think it is the case that whenever a lay client gives instructions to a legal practitioner to perform specialist legal services involving the exercise of professional skill, there is imposed on the solicitor a duty to give any advice reasonably necessary to protect the client’s interest sin the transaction whether expressly requested or not. Two cases in this Court illustrating that rule are Watts v Public Trustee (WA) [1980] WAR 97 and Stone James & Co v Investment Holdings Pty Ltd [1987] WAR 363. See also Macpherson v Kevin J Prunty & Associates [1983] 1 VR 573. It is not a large step from that position to say that whenever a client gives instructions to his solicitor there is assumed to be a request for advice. In my opinion, discourse between solicitor and client with reference to the transactions covered by those instructions, that is, professional discourse in 5 Cross on Evidence (7 th Australian ed) at [25240]. 6 (1991) 4 WAR 325. -- 12 of 18 -- 13 a professional capacity, should be regarded as prima facie for the purpose of giving and receiving advice. This would apply to any communication that is on its face a communication of a professional nature from the solicitor to the client or his agent touching the subject matter of the solicitor’s engagement and any communication from the client to the solicitor in connection with that engagement. Only if the rule is applied in that way can the policy of it be carried out and its object practically fulfilled. I think this is recognised in the earlier English cases such as Mostyn v West Bostyn Coal Co (supra), Minet v Morgan [1873] 8 Ch App 361 and Lawrence v Campbell (1859) 4 Drew 485; 62 ER 186, referred to with evident approval by Dawson J in Baker v Campbell (at 128), and as well, Australian cases such as Haydon v McLeod (1900) 26 VLR 452 in which Hodges J said at 454: “I take it to be now established as a correct principle that a professional communication between a solicitor and his client, made to him as a solicitor, is privileged – certainly prima facie – unless there is something else to take it out of the privilege.” See also Kelly v Commonwealth of Australia (1980) 39 FLR 372 where Blackburn J in the Supreme Court of the Australian Capital Territory referred to Haydon v McLeod (supra) as “a case which appears never to have been questioned”. What is protected, of course is that which is communicated between solicitor and client. It is the communication that is privileged. But this is not to say that material that is not literally a communication or manifestly the record of a communication is never protected. There are many instances of protection being extended to such material. The examples of the draft letter that never leaves the solicitor’s office, the draft agreement and the draft statement of claim have already been referred to. The reason why such material is protected is often stated to be that disclosure of it will, or will tend to, reveal the privileged communication: see Attorney- General (NT) v Maurice, per Dawson J (at 496). Thus a note made by a solicitor of a conference with his client will be privileged in so far as it is a record of the communication from the client (that communication being privileged) but also in so far as it might contain notes of the solicitor’s own thoughts in regard to the matters communicated to him. Protection is afforded in the latter case on the ground that disclosure of that material might tend to reveal what had been communicated to the solicitor. There is much in the cases to support the view that this is the true basis upon which draft agreements, draft letters, draft pleadings and the like have long been accepted as “communication” but because they will, if disclosed, reveal, or tend to reveal, the content of privileged communications. Material created by the solicitor in fulfilment of his engagement “is the result of the solicitor’s mind working upon and acting as professional adviser with reference to” material communicated to him confidentially in his professional capacity (Kennedy v Lyell [1883] 23 Ch D 387 at 407) and, as such, will by its very nature then to reveal the content of the communication in response to which it had been prepared. Of course, there are limits and these have often been stated. The material must have been created solely for the purpose of fulfilling the engagement. The material must be confidential. No protection can extend to agreements in their final form intended to constitute the actual transaction between the parties or to records made for the purpose of evidencing an actual -- 13 of 18 -- 14 transaction, or to letters sent or to forms lodged at public offices or to pleadings filed in courts. This is because legal professional privilege exists to secure confidentiality and such material is no longer confidential. I do not think I need to consider at what precise point such material would lose its confidentiality and cease to be protected. Perhaps an engrossment prepared for the purpose of execution would not be privileged even if it never was executed. In such cases, much might depend upon the precise facts. There are other exceptions. Protection does not extend to all facts learned by the solicitor in the course of his engagement.. Objective facts “patent to the senses” (Kennedy v Lyell (supra) at 407) which have an independent existence, and may be observed by others and which the solicitor has observed independently of any confidential communication from his client are not protected: see Brown v Foster [1857] 1 H & N 736; National Crime Authority v S (1991) 29 FCR 203. And communications that are in themselves part of a criminal or fraudulent activity are not protected. No doubt there are other exceptions but I do not think any other exceptions arise for consideration in this case. ” [22] After citing considerable portions of that passage, and other authorities, Allsop J (as his Honour then was) said in DSE (Holdings) Pty Ltd v InterTAN Inc7 that “too literal a requirement of identifying legal advice as express advice about the law would place undue emphasis on formalism and undermine the privilege”. [23] Having perused the documents in question, and having already found the “dominant purpose” test to be satisfied, I am also satisfied that the documents are prima facie protected by advice privilege on the grounds that the documents: (a) Are a direct record of privileged communications between Mr Mott and his client, the first plaintiff, or (b) Otherwise are documents which, if disclosed, will reveal, or tend to reveal, the content of such privileged communications. [24] The defendant further submits, however, that there has been an implied waiver of such advice privilege in this case because the plaintiffs, by having pleaded a case of rectification of the May 2007 agreement, have put in issue their states of mind in connection with the drafting and execution of that agreement. 7 [2003] FCA 1191. -- 14 of 18 -- 15 [25] Implied waiver was recently canvassed by the High Court in Osland v Secretary, Department for Justice.8 In that case, a woman imprisoned for murder had petitioned the Governor of Victoria for mercy. The Attorney-General of Victoria issued a press release stating that he had obtained a joint advice from three Queens Counsel, which recommended that the petition be denied, and that the Governor had denied the petition. The petitioner sought access to this joint advice under the Freedom of Information Act 1982 (Vic), but this was refused on the ground of legal professional privilege. One of the questions for determination was whether there had been an implied waiver of the privilege by the press release. Gleeson CJ, Gummow, Heydon and Kiefel JJ said 9 that a finding of implied waiver “reflects a judgment that the conduct of the party entitled to the privilege is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect” and that such a judgment “is to be made in the context and the circumstances of the case, and in light of any considerations of fairness arising from that context or those circumstances”. Their Honours, in a subsequent passage10 reinforced that such a judgment must be made in the context of, and will depend upon, the circumstances of the particular case. [26] To bolster the argument that advice privilege had been impliedly waived in this case, the defendant directed me to Ampolex v Perpetual Trustee Co (Canberra) Ltd.11 That case concerned a dispute about an agreement under which Ampolex had agreed to issue unsecured convertible notes to Perpetual Trustee. The notes were subsequently publicly listed, and quantities of the notes were purchased by entities known as Allied and GPG Nominees. The proceeding before the Court was to 8 (2008) 234 CLR 275. 9 At [45]. 10 At [49]. -- 15 of 18 -- 16 determine the rate of conversion of the notes – Ampolex contended that each note converted into one share in Ampolex, while Allied and GPG Nominees contended that one note converted into 6.6 shares. Allied and GPG Nominees alleged (for reasons stated at length in the judgment) that they were led by Ampolex to believe, in effect, that the conversion rate was 6.6. Ampolex also made allegations as to what it said were mistaken beliefs held by Allied and GPG Nominees. As Giles CJ Comm D said,12 each of these grounds was predicated upon issues concerning, inter alia, construction of the relevant trust deed and rectification of that deed, and summarised the issues as: “In short, did GPG Nominees and Allied believe that each note was convertible into one share of 6.6 shares, what did they believe Ampolex thought was the position, and what effect did their beliefs have on their conduct in purchasing the notes?” [27] Ampolex sought disclosure of documents over which advice privilege had been claimed by Allied’s and GPG Nominees’ solicitors. His Honour summarised the argument mounted by Ampolex 13 as follows: “Ampolex submitted that the documents in the hands of GPG Nominees, Allied and Sir Ronald Brierley, if ever attracting privilege, had lost their privilege when GPG Nominees and Allied alleged that they had purchased the notes in the belief induced by Ampolex that the notes were convertible on the basis set out in the trust deed and endorsed on the notes; alternatively, the allegation by Ampolex that GPG Nominees and Allied had particular beliefs as to its (Ampolex’s) state of mind had the same result. According to the submission, GPG Nominees and Allied had opened up for investigation and testing the source of and basis for their belief, and inspection could not be denied of documents relevant thereto, or alternatively the allegation by Ampolex did the same.” [28] After referring to the judgment of Jordan CJ in Thomasen v Campbelltown Municipal Council, 14 Giles CJ Comm D said: “The principle to which Ampolex appealed has recently been affirmed and applied in Benecke v National Australia Bank (1993) 35 NSWLR 109. It is 11 (1995) 37 NSWLR 405. 12 At 407. 13 At 411. 14 (1939) SR(NSW) 347. -- 16 of 18 -- 17 ultimately founded on the fairness considered in Attorney-General for the Northern Territory v Maurice (1986) 161 CLR 475. Confining attention to the allegation made by GPG Nominees and Allied (the alternative of the allegation made by Ampolex may raise other considerations, and I prefer to put it aside), having exposed to scrutiny their corporate states of mind, being states of mind to which their legal advice is likely to have contributed, GPG Nominees and Allied can not withhold the advice from their opponent. I emphasise that the legal advice is likely to have contributed to the states of mind of GPG Nominees and Allied, as was plain from the dates of and descriptions of the documents: were that not so, the principle may not have applied.” [29] It is clear from the rectification case pleaded in the 4ASOC that the crux of the plaintiffs’ case is an assertion of a belief that the May 2007 agreement extended to the Crump Street properties, and that the property descriptions for those properties were omitted “by mistake”. It is also relevant in that regard that, in an affidavit sworn on 12 February 2008, the first plaintiff deposed to giving Mr Mott instructions concerning the May 2007 agreement by telling Mr Mott “what I understood [the defendant’s] position to be, and asked him to prepare an agreement for everyone to sign”. [30] Determination of the rectification case sought to be mounted by the plaintiffs will obviously require an examination of the negotiations prior to the execution of the May 2007 agreement and of the other extrinsic facts which point to the existence of the error sought to be rectified. Having regard to the circumstance of the particular case of rectification which is pursued by the plaintiffs, and the sworn statement by the first plaintiff as to the instructions he gave to the solicitor who drafted the document ultimately executed as the May 2007 agreement, it seems to me that, by exposing their states of mind in connection with the content of the May 2007 agreement to scrutiny, the plaintiffs, particularly the first plaintiff, also exposed to scrutiny the otherwise privileged communications with the solicitor in connection with that agreement. If, as they contend to be the case, their state of mind was that -- 17 of 18 -- 18 the Crump Street properties were included in the agreement, it cannot sensibly be said, in my view, that the solicitor’s advice (in the general sense of that term, as described by Anderson J in Dalleagles) did not contribute to that state of mind. A fortiori, as appears to be sworn to by the first plaintiff, when it is said that the instructions to the solicitor reflected the defendant’s relevant state of mind. [31] Accordingly, it seems to me that there has been an implied waiver of the advice privilege in respect of the documents on Mr Mott’s file which are directly relevant to the issues raised in connection with the May 2007 agreement. [32] Finally, I note that r 247(3) provides that, unless the Court otherwise orders, each party on an application such as this must bear its own costs. Having regard to the course of argument before me, the determinations of the various issues traversed above, and also recognising the legitimate public interest in solicitors being vigilant to appropriately safeguard their clients’ substantive rights arising from the principles of legal professional privilege, I see no reason to depart from the general provision as to costs in this instance. [33] I order: 1. The stay on the notice of non-party disclosure directed to Mr Mott is lifted only in respect of those documents on his file which were created, or are dated, in the period 25 May 2007 – 28 May 2009 (inclusive); 2. The documents referred to in Order 1 be produced for inspection within seven days; 3. Mr Mott’s objection to production of documents on his file is otherwise upheld; 4. Each party pay its own costs of and incidental to this application. -- 18 of 18 --