FEDERAL COURT OF AUSTRALIA

Davaria Pty Limited v 7-Eleven Stores Pty Ltd [2018] FCA 760

ORDERS

THE COURT ORDERS THAT:

1.    The First Respondent not seek to tender a copy of NDJ-38 in any hearing before the Court or disclose the contents of NDJ-38, in submissions or otherwise.

2.    Annexure NDJ-38, NDJ-39, NDJ-40 and NDJ-41 to the affidavit of Nigel David Jones sworn 7 May 2018 be removed from the Court file, and the First Respondent not disseminate NDJ-38 or its contents to any other person.

3.    The First Respondent pay the Applicant’s costs of this application.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ORDERS

THE COURT ORDERS THAT:

1.    The First Respondent not seek to tender a copy of NDJ-38 in any hearing before the Court or disclose the contents of NDJ-38, in submissions or otherwise.

2.    Annexure NDJ-38, NDJ-39, NDJ-40 and NDJ-41 to the affidavit of Nigel David Jones sworn 7 May 2018 be removed from the Court file, and the First Respondent not disseminate NDJ-38 or its contents to any other person.

3.    The First Respondent pay the Applicants’ costs of this application.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

MURPHY J:

1    This application concerns whether privilege attaches to a communication that is the subject of an interlocutory application shortly listed for hearing. The dispute arises in the context of two class actions brought by the applicants, Davaria Pty Ltd, Pareshkumar Davaria and Khushbu Davaria, against the respondents, 7-Eleven Stores Pty Ltd (7-Eleven) and ANZ Banking Group Ltd (ANZ). For convenience, I will refer to the applicants across both proceedings as “Davaria”.

2    Davaria Pty Ltd is a 7-Eleven franchisee. It brings proceeding VID 180 of 2018 on its own behalf and on behalf of all persons who entered into one or more standard-form franchise agreements with 7-Eleven prior to commencement of the proceeding (franchisees), who have suffered loss or damage as a result of the conduct of either 7-Eleven or ANZ, and who are not statute barred and have not entered into a binding and enforceable release of all their claims against 7-Eleven or ANZ which are the subject of this proceeding.

3    Pareshkumar Davaria and Khushbu Davaria bring proceeding VID 182 of 2018 on their own behalf and on behalf of all persons who provided indemnities, guarantees, mortgages or other securities in relation to franchise agreements or bank loan contracts entered into by a franchisee (guarantors and mortgagors) who have not entered into a binding and enforceable release of all their claims against 7-Eleven and ANZ which are the subject of the proceeding.

4    The communication in question is a document titled Bulletin No. 12 (Bulletin 12) sent by the solicitors for Davaria, Levitt Robinson Solicitors (Levitt Robinson), to class members in the class actions who have retained the firm (client class members). One of the client class members subsequently disseminated the bulletin to a WhatsApp messaging group made up of franchisees and “interested parties”, some of whom are Levitt Robinson’s clients in the class actions and some of whom are not. A 7-Eleven franchisee who is not a client of Levitt Robinson (and who has not been identified) provided the bulletin to 7-Eleven. The solicitors for 7-Eleven, Norton Rose Fulbright Australia (Norton Rose), and Levitt Robinson then engaged in correspondence in relation to Bulletin 12.

5    Bulletin 12 is the subject of an interlocutory application by 7-Eleven in which it seeks a finding that the bulletin is misleading or deceptive and orders directing Levitt Robinson to send a corrective notice to class members. Davaria objects to the bulletin being relied upon on the basis that legal professional privilege attaches to it. It seeks orders that 7-Eleven not be permitted to tender Bulletin 12 in any hearing before the Court or disclose its contents in submissions or otherwise and that the bulletin be removed from the Court file and not be disseminated by 7-Eleven.

6    For the reasons I explain, I am satisfied that Bulletin 12 is a confidential document and/or communication between Levitt Robinson and that firm’s clients for the dominant purpose of Levitt Robinson providing legal advice to those clients. It is privileged pursuant to s 118 of the Evidence Act 1995 (Cth) (Evidence Act). The privilege is jointly held by those client class members to whom Levitt Robinson sent the bulletin. The joint privilege was not waived by the unilateral act of one of those persons in sending the bulletin to a WhatsApp group which included persons who were not Levitt Robinson’s clients. Nor do I consider the privilege was waived through letters sent by Levitt Robinson to Norton Rose Fulbright Australia (Norton Rose) in relation to Bulletin 12. In my view those letters were not inconsistent with Davaria and the client class members maintaining a claim for privilege.

THE RELEVANT PRINCIPLES

7    It is common ground between the parties that the questions of privilege and waiver fall to be determined under the Evidence Act: see Esso Australia Resources Ltd v Federal Commissioner of Taxation [1999] HCA 67; (1999) 201 CLR 49 at [15]–[28].

Privilege

8    Section 118 of the Evidence Act provides:

118    Legal advice

Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of:

(a)    a confidential communication made between the client and a lawyer; or

(b)    a confidential communication made between 2 or more lawyers acting for the client; or

(c)    the contents of a confidential document (whether delivered or not) prepared by the client, lawyer or another person;

for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client.

9    Section 117 of the Evidence Act defines “confidential communication” and “confidential document” to mean a communication made, or a document prepared, in such circumstances that when the communication was made or the document prepared:

(a)    the person who made the communication or prepared the document; or

(b)    the person to whom the communication was made, or for whom the document was prepared;

was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law.

10    The “dominant purpose” means the “ruling, prevailing or most influential purpose”: Federal Commissioner of Taxation v Spotless Services Ltd [1996] HCA 34; (1996) 186 CLR 404 at 416.

11    The purpose for which a communication is made or document is brought into existence is a question of fact to be determined objectively. Evidence of the intent of the maker of the document is not necessarily conclusive. The relevant purpose is the purpose as at the time the communication is made or the document is created. This may be established 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 established by reference to the nature of the documents, supported by argument or submissions: AWB Ltd v Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30 (Cole) at [44(1) and (2)] and the cases there cited.

12    The onus of establishing that a communication or document is privileged falls on the party which asserts the privilege.

Waiver

13    Section 122 of the Evidence Act provides:

122    Loss of client legal privilege: consent and related matters

(1)    This Division does not prevent the adducing of evidence given with the consent of the client or party concerned.

(2)    Subject to subsection (5), this Division does not prevent the adducing of evidence if the client or party concerned has acted in a way that is inconsistent with the client or party objecting to the adducing of the evidence because it would result in a disclosure of a kind referred to in section 118, 119 or 120.

(3)    Without limiting subsection (2), a client or party is taken to have so acted if:

(a)    the client or party knowingly and voluntarily disclosed the substance of the evidence to another person; or

(b)    the substance of the evidence has been disclosed with the express or implied consent of the client or party.

(4)    The reference in paragraph (3)(a) to a knowing and voluntary disclosure does not include a reference to a disclosure by a person who was, at the time of the disclosure, an employee or agent of the client or party or of a lawyer of the client or party unless the employee or agent was authorised by the client, party or lawyer to make the disclosure.

(5)    A client or party is not taken to have acted in a manner inconsistent with the client or party objecting to the adducing of the evidence merely because:

(a)    the substance of the evidence has been disclosed:

(i)    in the course of making a confidential communication or preparing a confidential document; or

(ii)    as a result of duress or deception; or

(iii)    under compulsion of law; or

(iv)    if the client or party is a body established by, or a person holding an office under, an Australian law—to the Minister, or the Minister of the Commonwealth, the State or Territory, administering the law, or part of the law, under which the body is established or the office is held; or

(b)    of a disclosure by a client to another person if the disclosure concerns a matter in relation to which the same lawyer is providing, or is to provide, professional legal services to both the client and the other person; or

(c)    of a disclosure to a person with whom the client or party had, at the time of the disclosure, a common interest relating to the proceeding or an anticipated or pending proceeding in an Australian court or a foreign court.

(6)    This Division does not prevent the adducing of evidence of a document that a witness has used to try to revive the witness’s memory about a fact or opinion or has used as mentioned in section 32 (Attempts to revive memory in court) or 33 (Evidence given by police officers).

THE EVIDENCE

14    Mr Stewart Levitt, the solicitor for Davaria and client class members, made an affidavit sworn 9 May 2018 which is read in both proceedings. He states that on 27 April 2018 he caused an employee solicitor, Mr Jem Punthakey, to send Bulletin 12 to class members in the proceeding with whom Levitt Robinson has an “established solicitor and client relationship”, meaning class members who had signed a retainer agreement with Levitt Robinson.

15    Mr Levitt states that he prepared Bulletin 12 and that he attempted to ensure only client class members would receive it. He did so by:

(a)    instructing Mr Punthakey to only send the bulletin via email to class member clients and Levitt Robinson staff;

(b)    directing Mr Punthakey to mark the covering email to the bulletin with the capitalised and bolded words “Confidential & Privileged” displayed in a prominent position;

(c)    including the following words at the footer of the covering email:

This message contains confidential information and is intended only for the individual named. If you are not the intended recipient you should not disseminate, distribute or copy this email. Please notify the sender immediately by email if you have received this email by mistake and delete this email from your system.

(d)    addressing the bulletin to “All 7-Eleven Franchisees, including former Franchisees and ANZ Borrowers, who are Clients of Levitt Robinson Solicitors”;

(e)    prominently marking the top of the bulletin with the bolded words “Privileged, Private & Confidential”; and

(f)    opening the bulletin with the sentence “This is a privileged, solicitor/client bulletin.”

16    Mr Levitt states that Mr Punthakey carried out his instruction to only send the communication to client class members by using a database of contact details recording the names of client class members. Counsel for 7-Eleven does not dispute that the bulletin was sent by Levitt Robinson only to that firm’s clients. Mr Levitt’s evidence in regard to the above matters is unchallenged and I accept it.

17    Mr Levitt also states that he prepared Bulletin 12 for the dominant purpose of providing client class members with professional legal services relating to the two class actions and to advise them regarding settlement. This evidence is not contradicted by other evidence, but 7-Eleven challenges it in submissions. The question of dominant purpose is one for the Court, and the test is objective rather than subjective.

18    Mr Nigel Jones, a partner at Norton Rose and the solicitor for 7-Eleven, affirmed an affidavit in both proceedings on 7 May 2018. Relevantly, he states:

On 27 April 2018, I was informed by Braeden Lord of [7-Eleven] and believe that he had been provided by a 7-Eleven franchisee who is not a client of Levitt Robinson with a copy of a message sent by WhatsApp electronic messaging application to a group comprising that franchisee and around 250 other members who are 7-Eleven franchisees or interested parties, which attached a Bulletin published on Levitt Robinson letterhead (Bulletin No. 12). I am informed by Mr Lord that the franchisee which provided Bulletin No. 12 to him wishes to remain anonymous.

7-ELEVEN’S CONTENTIONS

19    In summary, 7-Eleven contends that Bulletin 12 is not privileged because; (a) it was not a confidential document or communication; and (b) the document was not created and the communication was not made for the dominant purpose of Levitt Robinson providing legal advice to that firm’s clients. If, contrary to its submissions, the bulletin is found to be privileged 7-Eleven contends that privilege has been waived by the dissemination of the bulletin through a WhatsApp messaging group and/or through a letter by Levitt Robinson to Norton Rose. I will deal with 7-Eleven’s contentions in that order.

WHETHER BULLETIN 12 WAS CONFIDENTIAL

20    The onus of establishing that Bulletin 12 was a confidential document or communication falls on Davaria and the client class members who received it.

21    7-Eleven contends that Davaria has not established on the balance of probabilities that the bulletin was confidential. 7-Eleven argues, amongst other things, that:

(a)    Bulletin 12 is the latest in a series of publications by Levitt Robinson sent to a wide body of franchisees, and not just to the firm’s clients. Essentially it contends that Levitt Robinson’s bulletins, sent in the early stages of the class actions, are merely attempts by the firm to gather clients to participate in the class actions and that such marketing is not confidential;

(b)    there is nothing in the contents of the bulletin which is inconsistent with it having been intended for an audience of franchisees broader than those who are clients of Levitt Robinson;

(c)    the labelling of Bulletin 12 as privileged is not determinative of whether in fact it was confidential to Levitt Robinson’s clients;

(d)    the bulletin does not prohibit a client class member from republishing it and only states mildly that it is “intended” for Levitt Robinson’s clients. The bulletin contemplates a wider audience by explaining that clients are “those of you who have signed” a litigation funding agreement with the funder of the proceeding;

(e)    the bulletin explicitly canvasses a wider audience because it contains an invitation to attend information sessions to be conducted by Levitt Robertson in relation to the class action. It states:

Only Levitt Robinson Clients will be welcome but you will all be able to sign on at the beginning of the meeting as a Levitt Robinson client. You can terminate your relationship with us at the end of the meeting as a Levitt Robinson client.

This is said to show that the bulletin is directed at class members who are not existing clients of Levitt Robinson, and it was not confidential; and

(f)    the circumstances (namely that the bulletin was sent at an early stage of the class actions where Levitt Robinson was seeking to persuade further class members to sign up as clients, and the high-level nature of the information and discussion in the bulletin) indicate that it was merely an entreaty to the reader to participate in the information sessions and the proceeding.

22    I do not accept 7-Eleven’s contentions.

23    First, while the labelling of Bulletin 12 is not determinative, the fact that the bulletin: (a) was only sent to clients of Levitt Robinson; (b) was sent under cover of an email prominently headed “Confidential & Privileged”; (c) was addressed to clients of Levitt Robinson only; (d) carried the prominent bolded heading “Privileged, Private & Confidential”; (e) carried the advice in the first sentence that “[t]his is a privileged, solicitor/client bulletin”; and (f) stated that “this Bulletin it is only intended for our clients”, is cogent evidence that it was confidential and the recipient was under an express or implied obligation not to disclose its contents. That is reinforced by Mr Levitt’s unchallenged evidence that Bulletin 12 was sent only to clients of the firm and that he attempted to ensure that only client class members would receive the bulletin by directing that it be repeatedly marked as privileged and confidential.

24    Second, the fact that Bulletin 12 is the latest in a series of publications by Levitt Robinson provides little support for 7-Eleven’s arguments. Levitt Robinson’s Bulletins numbered 7, 9 and 11 are also in evidence. None of those bulletins were addressed only to clients of Levitt Robinson, they do not carry the heading “Privileged, Private & Confidential”, advise “[t]his is a privileged, solicitor/client bulletin” or state that they were only intended for Levitt Robinson’s clients, and I infer they were not sent under cover of emails carrying the heading “Confidential & Privileged”. The earlier bulletins were explicitly addressed to (amongst others) “All 7-Eleven Franchisees and former franchisees” and no claim for privilege is made in relation to those communications. These differences between Bulletin 12 and the earlier bulletins are important and tend to show that Bulletin 12 was confidential.

25    Third, 7-Eleven’s contention that Bulletin 12 does not prohibit a client class member from republishing it is overstated. The bulletin was only sent to clients of Levitt Robinson, it expressly states that it is only intended for clients of the firm and is privileged, and it warns the recipients that “if you re-publish it, you are potentially waiving the privilege which attaches to this document”. As I have said, I accept Mr Levitt’s unchallenged evidence that he attempted to ensure that only client class members would receive the bulletin.

26    Fourth, and relatedly, 7-Eleven places too much emphasis on the passage in Bulletin 12 which contemplates the possibility of non-client class members attending the scheduled information sessions. Read in the context to which I have just referred it is appropriate to accept Mr Levitt’s explanation that the relevant passage was intended to inform Levitt Robinson clients that they could invite other franchisees to attend the information sessions. The impugned passage should not be read divorced from the context of the document as a whole and Mr Levitt’s unchallenged evidence.

27    7-Eleven also submits that, by reference to the invitation to attend the information session, it appears that Bulletin 12 was initially prepared by Mr Levitt to be sent to all franchisees, including those who were not clients. The addition of headings and advice regarding confidentiality and privilege, and the specific addressing to Levitt Robinson clients, were said to be “afterthoughts”. This submission is mere supposition but, even if this were the case, that would point away from 7-Eleven’s contention. It would tend to show that before he sent Bulletin 12, and having regard to its contents, Mr Levitt decided it should be a confidential communication and made changes distinguishing it from previous bulletins to ensure it would be treated as such.

28    Finally, notwithstanding that counsel for 7-Eleven disavowed any such submission, in my view this aspect of 7-Eleven’s argument includes the contention that Bulletin 12 was cloaked with confidentiality but was intended for broader circulation and carried an oblique invitation to Levitt Robinson’s clients to distribute it more widely. I give little weight to such a contention when 7-Eleven did not challenge Mr Levitt’s evidence in cross-examination. As I have said, I accept his evidence that only Levitt Robinson clients were intended to receive the bulletin.

29    I am satisfied to the requisite standard that Bulletin 12 was a confidential communication and/or document.

WHETHER THE DOCUMENT WAS CREATED OR THE COMMUNICATION MADE FOR THE DOMINANT PURPOSE OF PROVIDING LEGAL ADVICE

30    Davaria bears the onus of establishing that the dominant purpose of Bulletin 12 is the provision of legal advice to Levitt Robinson’s clients, and 7-Eleven submits that Davaria has not established this. Notwithstanding that 7-Eleven already has the bulletin, given my conclusion that it is privileged it is appropriate to discuss its contents only in general terms so as to protect that privilege.

31    7-Eleven contends, amongst other things:

(a)    Bulletin 12 is styled as a “bulletin”. It provides an update about the status of the class actions, and informs class members about the information sessions. While those matters are relevant to Levitt Robinson’s class member clients they are equally consistent with informing class members as a whole and encouraging them to attend the information sessions and participate in the proceeding;

(b)    the bulletin provides details of discussions between Levitt Robinson and the funder, but there is no evidence that such discussions are confidential. The statements in the bulletin relating to litigation funding are equally relevant to class members who are not Levitt Robinson’s clients. What follows in the bulletin might be described as Mr Levitt’s opinions as to the import of those discussions and it does not show a purpose of giving legal advice;

(c)    the bulletin contains only a high level discussion in relation to settlement and the surrounding circumstances and invites the reader to meet and speak with Mr Levitt confidentially. The conclusions it draws do not constitute the provision of legal advice and to the extent that this aspect of the bulletin exhibits any purpose of providing legal advice that purpose does not predominate over other purposes; and

(d)    overall, considered in the context of Levitt Robinson attempting to gather clients in the early stages of the class actions, the contents of the bulletin indicate that it had several purposes. There is insufficient evidence to show that the dominant purpose of the communication was to provide legal advice to Levitt Robinson’s clients.

32    Having given the bulletin careful consideration I take a different view.

33    First, the bulletin provides Levitt Robinson’s clients with an update about the status and funding of the class actions, and extends an invitation to attend an information session at which they could ask questions. It includes Mr Levitt’s opinions about the current status of the proceedings and, at a high level, in relation to settlement. The terms of the bulletin indicate a dominant purpose of providing an update to Levitt Robinson’s clients about the class actions, and broadly advising them in relation to strategy and important developments in the proceedings including discussions with the funder and in relation to settlement.

34    What may constitute “legal advice is broad and 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”: see Cole at [44(7)] and the authorities therein. There is no requirement that legal advice, about settlement or other matters, must be pitched at a particular level of detail. The bulletin’s contents fall within the meaning of “legal advice”.

35    Second, while the legal advice provided is high-level it is important to keep in mind the surrounding circumstances and the characteristics of the recipients. It was sent to a large number of franchisees of convenience stores rather than to lawyers many of whom are unlikely to be sophisticated. The bulletin was not an occasion for individualised or more specific advice and it was appropriate that advice in a mail-out to all Levitt Robinson’s clients be general in nature. Such bulletins are commonly deployed in class actions as an efficient method of providing advice to numerous class members with more specific advice, tailored to the individual circumstances of a particular client, being provided on request. The bulletin invited class members to contact Levitt Robinson for more specific advice.

36    Third, while the test for dominant purpose is objective, Mr Levitt’s unchallenged evidence that his purpose in preparing and sending Bulletin 12 to Levitt Robinson’s clients was to provide professional legal services to those clients and to advise them in relation to settlement is cogent.

37    Fourth, while this is not determinative, the bulletin is headed “Privileged, Private and Confidential”; it is addressed to Levitt Robinson’s clients only; and it states that it “is intended only for our clients”, it is “a privileged, solicitor/client bulletin” and “if you re-publish it, you are potentially waiving the privilege which attaches to this document”.

38    Fifth, there is little significance in the fact that the information and advice in Bulletin 12 is relevant to class members as a whole. In class proceedings it will often be the case that legal advice provided to client class members would be equally relevant to non-client class members, and that fact is far from central to deciding whether the bulletin is privileged.

39    I am satisfied that Bulletin 12 was a confidential document and/or confidential communication made by Levitt Robinson to clients of that firm for the dominant purpose of providing legal advice to those clients. I am accordingly satisfied that the bulletin is privileged pursuant to s 118 of the Evidence Act.

WAIVER

40    If, as found, Bulletin 12 is privileged 7-Eleven submits that privilege was waived by the dissemination of the bulletin through the WhatsApp messaging group and through letters sent by Levitt Robinson to Norton Rose.

41    Pursuant to s 122(2) of the Evidence Act waiver will occur if a client acts in a way that is inconsistent with the client objecting to the adducing of the relevant evidence because it would result in disclosure of a privileged communication or document. The touchstone of inconsistency between conduct and the maintenance of privilege is informed where appropriate by limited considerations of fairness: Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1 at [29]. The question of waiver is to be determined pursuant to s 122(2), but the understanding of the section may be informed by the common law.

42    The burden of establishing waiver is on the party seeking to persuade the court that privilege has been lost: Hodgson v Amcor Ltd (No 4) [2011] VSC 269; (2011) 32 VR 568 (Hodgson v Amcor) at [14]-[15] per Vickery J. Counsel for 7-Eleven accepted that, pursuant to s 122(2), it bears the evidentiary burden of establishing an act that is inconsistent with the maintenance of privilege. Where the inquiry shifts to s 122(5) it is for the party claiming privilege to establish the matters in subparas (a), (b) and (c) on the balance of probabilities because such matters are likely to be solely known to the privilege claimant and therefore fall uniquely within the province of proof of that party: Hodgson v Amcor at [20].

43    A conclusion that privilege has been waived should not lightly be reached. As Allsop J (as his Honour then was) said in DSE (Holdings) Pty Ltd v Intertan Inc [2003] FCA 384; (2003) 127 FCR 499 at [24]:

[L]egal professional privilege in Australia is not a mere matter of evidence; it is a rule of substantive law and important, indeed fundamental, common law right or immunity.

In Hodgson v Amcor at [24] Vickery J explained that “once the privilege has been established, any question of waiver should be determined on the balance of probabilities on evidence which is sufficiently clear and unequivocal.”

Dissemination through the WhatsApp messaging group

44    Privilege may be waived by the person or persons entitled to the benefit of the privilege, and whether privilege is waived may therefore depend on who holds it. Bulletin 12 was sent by Levitt Robertson only to its client class members in the proceedings. Counsel for 7-Eleven accepted that if the bulletin is privileged, the privilege is held jointly by the Levitt Robinson clients to whom it was sent.

45    In Mercantile Mutual Insurance (NSW Workers Compensation) Ltd v Murray [2004] NSWCA 151 (MMI) at [41] Mason P explained joint privilege as follows:

If two persons join in a legal enterprise, the privilege is their joint privilege. From this it follows that the privileged communication may be disclosed to each without breach of privilege, because each client shares an interest in the subject matter of the communication. Joint clients may not maintain privilege against each other (Re Konigsberg (a bankrupt), ex parte the Trustee v Konigsberg [1989] 3 All ER 289 at 297). The parties are together entitled to maintain their privilege against the rest of the world, and this means that waiver by one is insufficient to affect the other’s privilege (see generally Farrow Mortgage Services Pty Ltd (in liq) v Webb (1996) 39 NSWLR 601 at 608A-D and Evidence Act, s 122(5)).

(Emphasis added)

46    Mr Jones states a 7-Eleven franchisee who is not a client of Levitt Robinson provided 7-Eleven with a copy of a WhatsApp message which attached the bulletin. He says that one of Levitt Robinson’s clients who received Bulletin 12 sent it to a group of approximately 250 franchisees and “interested parties”, which included persons who are not clients of Levitt Robinson. He says that he knows the identity of that franchisee that provided the WhatsApp message to him but, at the request of that person, he did not reveal that person’s identity. Mr Jones’ evidence in this regard is unchallenged and I accept it.

47    The question is whether the unilateral act of one of Levitt Robinson’s clients in disseminating the bulletin on WhatsApp constitutes waiver. The common law position is that disclosure by one holder of joint privilege will not be sufficient to destroy privilege for the remaining joint privilege holders. In Farrow Mortgage Services Pty Ltd (in liq) v Webb (1996) 39 NSWLR 601 (Farrow) at 608A Sheller JA (with whom Waddell A-JA agreed) expressed the principle as follows:

Logically the joint nature of the privilege means that all to whom it belongs must concur in waiving it. Theirs is one inseverable right. In pars 20-29 the learned editors of Phipson say that in the case of joint interest, it is sufficient, as against third persons, if only one of the interested parties claims to privilege, though all must concur in waiving it.

48    Section 122(5)(b) of the Evidence Act is not as clear. Odgers’ Uniform Evidence Law (12th edition) at [122.360] states:

An interesting question not answered by this provision is whether disclosure by one client which results in loss of privilege for that client has a corresponding effect on a joint client’s privilege. At common law, waiver by one client is insufficient to affect the other’s privilege. The same result may flow under the Act by a distributive reading of s 122 (that is, disclosure by “a client” could not result in loss of privilege for another client).

49    In my view such a reading of s 122(5)(b) is appropriate. First, this interpretation is consistent with the statutory language. Second, I note that in 2005 and 2006 the joint Australian Law Reform Commission and New South Wales Law Reform Commission report titled Uniform Evidence Law (Report 102, December 2005) was tabled in the Commonwealth and Victorian Parliaments and published in NSW. It did not specifically discuss joint privilege or s 122(5)(b) but in discussing waiver under s 122 the report stated (at [14.147]):

The Commissions therefore recommend that the uniform Evidence Acts be amended to align s 122 (which sets out when client legal privilege under the uniform Evidence Acts is lost because of consent, or voluntary disclosure) more closely with the common law as set out in Mann v Carnell.

50    There is nothing to indicate that the legislature intended to modify the common law position as regards waiver of joint privilege, and the extrinsic material instead indicates an intent to more closely align waiver under s 122 with the common law position. Given the fundamental importance of privilege any abrogation of the common law position should not be lightly inferred: Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; (2002) 213 CLR 543 at 552–553.

51    Counsel for 7-Eleven accepted that, broadly speaking, the principles regarding waiver of joint privilege described in Farrow continue to apply under s 122. Counsel accepted that where privilege is held jointly, the actions of one of the privilege holders will not necessarily mean that privilege is lost for the others. Counsel argues however that whether privilege is waived depends upon the context and surrounding circumstances of the relevant acts. By way of example counsel contends that where 99% of a group who held joint privilege in a document published it on the internet it could not be the case that one person who did not do so could continue to maintain the privileged status of the document.

52    7-Eleven submits that the act of one of Levitt Robinson’s clients in sending Bulletin 12 to approximately 250 franchisees and “interested parties” through a WhatsApp messaging group is inconsistent with Davaria and the client class members objecting to 7-Eleven adducing the bulletin in evidence. It argues that:

(a)    Levitt Robinson sent the bulletin to its clients at an early stage of the class actions when the firm was in a phase of “corralling and managing” the class members to sign up to the funding arrangements and to become clients;

(b)    the communication in the circumstances of the present class actions should be seen as “global or composite” as distinct from in an ordinary case where one lawyer may communicate with multiple parties who are clients. When pressed as to the meaning of this submission counsel for 7-Eleven submitted that the group or representative nature of the proceeding, including that it is in its early stages, means that it is appropriate to treat the communication as being made to a global body, as distinct from being made to multiple clients. Counsel said that “in that way, the way in which the communication is provided to the recipients here has less of the character of joint privilege being held between multiple distinct individuals, but rather being held by a body of recipients”; and

(c)    in the circumstances of the present case the conduct of one client class member in placing the bulletin on WhatsApp is inconsistent with the other client class members maintaining their privilege, essentially because each of the client class members participate in the action on the basis that the actions of another client class member may, in suitable circumstances, affect their privilege.

53    In my view 7-Eleven’s submissions boil down to the argument that each client class member received the privileged bulletin from Levitt Robinson subject to the possibility or prospect that any other client class member was able to waive the privilege. They carry the proposition that by becoming clients of Levitt Robinson along with other persons each client class member accepted that one of their number might waive the privilege of all of the others.

54    I do not accept these contentions.

55    First, 7-Eleven’s argument is essentially circular. It accepts that the privilege in the bulletin is jointly held by the client class members and that the principle in Farrow broadly applies, but it argues that the privilege is held globally such that the act of one client can constitute waiver for the others. To say that the “global body” of client class members holds joint privilege in the way 7-Eleven contends is to conclude that none of them, in fact, enjoy the benefit of joint privilege. If 7-Eleven’s contention is correct none of the client class members enjoy any protection against waiver of their joint privilege by another of their number.

56    Second, 7-Eleven disavows any reliance on the general nature of Part IVA proceedings to support its contention that client class members should be treated as a global body for the purposes of joint privilege. Instead it relies on the particular circumstances of this case and contends that the basis upon which each class member became a client of Levitt Robinson is a group one. It argues that the premise on which group communications are received by client class members is that they have communal or global character, qualified by the circumstances in which they receive it.

57    However, 7-Eleven took the Court to nothing to show that those class members who retained Levitt Robinson did so on the basis that any privilege they had in confidential joint communications from Levitt Robinson was communal or global, and could be unilaterally waived by another class member. 7-Eleven did not take the Court to the terms of the client class members’ retainers to make out its contention. Nor can I see anything in the particular circumstances such as to indicate that privilege is held by on a group basis, and one client class member may waive privilege for all.

58    Third, I can see little merit in any suggestion that privilege in a communication by a lawyer made to joint clients who are class members in a Part IVA proceeding should be treated as held “globally" by the group, and differently from privilege in a communication by a lawyer to joint clients in other circumstances. There is no reason in principle for taking a different approach to the privilege in confidential communications between a lawyer and client depending upon whether the Part IVA procedure or some other procedure for bringing multiple claims is utilised. The Court was not taken to anything in Part IVA which might support the conclusion that in class actions the fundamental right to privilege in confidential communications made by a lawyer to joint clients is diminished.

59    Fourth, 7-Eleven’s example in which 99% of class members published a document on the internet in which they jointly held privilege, and one class member sought to maintain privilege in the document, is far removed from the present case. In this case one unnamed client class member disclosed the contents of the bulletin notwithstanding prominent and express warnings not to do so. There is nothing to indicate that Davaria or other client class members knew or consented to that disclosure, either expressly or impliedly.

60    Given my conclusion in relation to joint privilege it is unnecessary to decide whether common interest privilege attaches to the bulletin pursuant to s 122(5)(c). But another way in which the present case differs from 7-Eleven’s example is that the members of the WhatsApp messaging group may share a common interest in relation to the proceedings with Davaria and client class members. At the least, it is not clear on the evidence that they do not.

61    Pursuant to 122(5)(c) of the Evidence Act and the common law, where a client only discloses a privileged communication or document to persons with a common interest in relation to a legal proceeding privilege may not be waived: Australian Securities and Investments Commission, in the matter of Whitebox Trading Pty Ltd v Whitebox Trading Pty Ltd [2017] FCA 324 at [40]. The test for the existence of common interest privilege is not strict. A common interest in the outcome of litigation will be sufficient to enable any party with that interest to rely upon it (Farrow at 608-9) but the interest will not be sufficient if the individuals’ interests in the question are selfish and potentially adverse to each other: Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405 (Ampolex) at 410.

62    The only evidence as to the make-up of the WhatsApp messaging group is the evidence of Mr Jones who states that an unnamed franchisee told Mr Braeden Lord of 7-Eleven that the WhatsApp messaging group comprised 250 franchisees and “interested parties”. There is no evidence as to what the unnamed franchisee intended by the description “interested parties” or who it might designate.

63    I do not decide whether the members of the WhatsApp group share a common interest in the outcome of the proceeding with Davaria and client class members but, on the evidence as it is, it is not clear that they do not. Amongst other things:

(a)    VID 180 of 2018 is an ‘open’ class action which covers all 7-Eleven franchisees who have suffered loss or damage as a result of the pleaded conduct of either 7-Eleven or ANZ, who are not statute barred and who have not entered into a binding and enforceable release of all their claims. Franchisees who are class members but not clients of Levitt Robinson share a common interest in the outcome of the proceeding. There is no evidence that those members of the WhatsApp group who are franchisees are statute barred or have signed a release;

(b)    VID 182 of 2018 is an ‘open’ class action which covers all persons who provided indemnities, guarantees, mortgages or other securities in relation to franchise agreements or bank loan contracts entered into by a franchisee, who have not entered into a binding and enforceable release of all their claims. Guarantors or mortgagors who are class members but not clients of Levitt Robinson share a common interest in the outcome of the proceeding. There is no evidence that those members of the WhatsApp group who are guarantors or mortgagors have signed a release. Counsel for 7-Eleven accepted that such persons may be “interested parties” as described by 7-Eleven’s unnamed informant; and

(c)    those franchisees, guarantors and mortgagors who have signed a release fall outside the class definitions in the proceedings and therefore cannot recover damages. However they may nonetheless have an interest in the outcome of the proceedings given that the proceedings include claims for declarations as to the proper construction of the material terms of the standard form franchise agreements and that certain of those terms are unfair and therefore void pursuant to ss 23 and 24(1) of the Australian Consumer Law in Schedule 2 of the Competition and Consumer Act 2010 (Cth).

64    As joint clients of Levitt Robinson the client class members to whom Bulletin 12 was sent by that firm jointly hold the privilege in that communication, and they do so “against the rest of the world”. Generally speaking, privilege must be waived by each privilege holder before it is lost: Farrow at 608; MMI at [41]; Ampolex 413. I am not persuaded that an unidentified class member’s unilateral act in disseminating the bulletin to a WhatsApp messaging group, in all the circumstances and contrary to express warnings not to do so, is inconsistent with Davaria and other client class members objecting to 7-Eleven adducing the bulletin as evidence.

Waiver through correspondence by Levitt Robinson

65    7-Eleven contends that Levitt Robinson waived privilege in Bulletin 12 by engaging in correspondence with the Norton Rose about its contents.

66    The facts are that Mr Jones of Norton Rose wrote to Levitt Robinson on 1 May 2018 stating that 7-Eleven was very concerned about Bulletin 12, and taking issue with its contents. Mr Jones asserted that the bulletin conveyed a number of misleading representations and sought to require Levitt Robinson to publish a retraction and correction. The letter said that if Levitt Robinson did not agree to do so 7-Eleven would apply to the Court for appropriate relief.

67    Mr Levitt responded by letter on 4 May 2018, seeking Norton Rose’s response as to how 7-Eleven came into possession of the bulletin which was “expressly addressed to our own clients” and “sent out only to our clients”. Importantly, the letter stated:

Given that Bulletin No. 12 is a “Privileged” document, there is no evidence that privilege has been waived by any of our clients. Our decision to respond to your letter of 1st inst. is only by way of acknowledgement of the reality that you have received the document.

In the balance of the letter Mr Levitt responded to the concerns raised by Norton Rose in relation to the bulletin and particularly the allegations that it conveyed misleading representations.

68    7-Eleven contends that by responding in relation to the substance of the bulletin rather than stopping at the claim of privilege, Levitt Robinson’s letter is inconsistent with Davaria’s objection to 7-Eleven adducing the bulletin in evidence. It argues that:

(a)    although Levitt Robinson’s letter asserted privilege in the bulletin, it did not seek to restrain 7-Eleven’s further use or retention of the bulletin;

(b)    in “acknowledgement of the reality that [Norton Rose] have received the document”, and rather than seeking to preserve confidentiality over the contents of the bulletin, Mr Levitt engaged in a debate about the accuracy of its contents; and

(c)    the letter can only be seen as proceeding on the basis that the bulletin is no longer confidential as against 7-Eleven, and it is therefore inconsistent for Davaria to object to the adducing of the bulletin in evidence.

69    I disagree. I am not persuaded that Levitt Robinson’s letter is inconsistent with Davaria’s objection to the bulletin being adduced.

70    First, the letter dealt with the substance of the bulletin only after first asserting privilege in relation to the bulletin and denying any waiver. Levitt Robinson asserted privilege at the first opportunity it had to do so and it did not sit by and fail to claim privilege in respect to the bulletin already in the hands of 7-Eleven: see Spedley Securities Ltd (In Liq) v Bank of New Zealand (1991) 26 NSWLR 711 at 730 per Cole J.

71    Second, 7-Eleven’s contention that Mr Levitt was required to stop at the point of asserting privilege, and to refrain from any discussion of the contents of the bulletin or privilege would be lost, is artificial. The reference in his letter to the privilege attaching to the bulletin and the express statement that the response is “only by way of acknowledgement of the reality that [Norton Rose] have received the document” is consistent with Davaria maintaining privilege in the bulletin while responding to the issues raised by Norton Rose.

72    In my view taking the approach advocated by 7-Eleven would have been inconsistent with Mr Levitt’s overarching obligation to resolve issues as quickly, inexpensively and efficiently as possible pursuant to s 37M of the Federal Court of Australia Act 1976 (Cth). 7-Eleven had the bulletin, it had deployed its contents against Davaria and client class members, and it had threatened to make an application to the Court if Levitt Robinson did not publish a retraction and correction. Mr Levitt’s decision to deal with the issues raised in the letter and thereby reduce the chance of an application to Court was consistent with his obligations under s 37M.

73    Third, Levitt Robinson’s letter dealt with the substance of the bulletin only after Norton Rose’s assertion that it contained misleading representations and warning of an application to Court for orders for a correction and retraction. This distinguishes the present case from one where the party entitled to privilege deploys a partial disclosure for forensic advantage while seeking unfairly to deny the other party to seek the full text or associated material from which the disclosure was made: see Secretary, Department of Justice v Osland [2007] VSCA 96; (2007) 95 ALD 380 at [67]. Levitt Robinson did not put the substance of the bulletin in issue in order to gain some advantage. 7-Eleven already had the bulletin and had already deployed its contents against Levitt Robinson. Levitt Robinson simply responded.

74    In my view Levitt Robinson’s limited discussion of the bulletin’s contents following a clear assertion of privilege is consistent with Davaria maintaining an objection to 7-Eleven adducing the bulletin in evidence. Amongst other things, I can see no unfairness to 7-Eleven in allowing Davaria to maintain privilege.

CONCLUSION

75    For the reasons I have explained I consider Bulletin 12 to be privileged pursuant to s 118 of the Evidence Act, as a confidential document and/or confidential communication between a lawyer and joint clients for the dominant purpose of the lawyer providing legal advice to those clients. That privilege was jointly held by Levitt Robinson’s clients and I do not consider that privilege was lost pursuant to s 122(2) by either of the disclosures upon which 7-Eleven relies.

76    I have made orders essentially in the terms proposed by Davaria and for 7-Eleven to pay the costs of the application.

Associate:

Dated:    28 May 2018