FEDERAL COURT OF AUSTRALIA

Perazzoli v BankSA, a division of Westpac Banking Corporation Limited [2017] FCAFC 204

ORDERS

THE COURT ORDERS THAT:

1.    The limited leave to appeal allowed by Order 2 made on 23 June 2016 be extended such that leave is granted in respect of each ground of appeal alleged in the Amended Notice of Appeal dated 28 October 2016.

2.    The appeal is allowed and the cross-appeal dismissed.

3.    Orders 1 and 5 of the Orders made on 7 June 2016 be set aside.

4.    The First Respondent’s application to inspect the documents produced pursuant to subpoenas issued to Nicholas David Cooper, LCM Litigation Fund Pty Ltd and GMG Legal Services Pty Ltd:

(a)    be allowed only in respect of the documents (or parts of documents) in respect of which the Appellants and group members made no objection to inspection, as identified by the notation “No objection” in the column headed “Basis for claim for privilege or objection to inspection” in annexure “AV-1” to the affidavit of Antonietta Vozzo sworn on 21 April 2015; and

(b)    otherwise be dismissed.

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

REASONS FOR JUDGMENT

THE COURT:

A.    INTRODUCTION

1    This proceeding is an appeal by the appellants/cross-respondents, Galliano Perazzoli, Moreno Ferluga and William Johnson (the appellants) against the first respondent/cross-appellant, BankSA, a division of Westpac Banking Corporation Ltd (BankSA), from an interlocutory judgment of a single judge of this Court which partly refused the appellants’ claims of legal professional privilege: see Perazzoli v BankSA (No 2) [2016] FCA 260. BankSA cross-appeals in relation to a limited subset of documents in respect of which the appellants’ claims of privilege were allowed.

2    The underlying proceeding is a class action brought by the appellants under Part IVA of the Federal Court of Australia Act 1976 (Cth) (the Act) on their own behalf and on behalf of all persons who advanced monies during the claim period (whether described as a loan, a deposit or an investment) to the private lending business known as “Adelaide Lending Centre”. For convenience we describe the persons who advanced monies to that business as “investors” although that description may not always be apposite.

3    The proceeding alleges that the private lending business was a Ponzi scheme operated by the second respondent, Michael Samra, the third respondent, Mr Samra as trustee of the Michael Christopher Samra Family Trust trading as Adelaide Lending Centre (Mr Samra’s family trust), and the fourth respondent, Adelaide Lending Centre Group Pty Ltd (ALC), a company controlled by Mr Samra and his wife (collectively, the Samra entities). It alleges that the scheme was implemented with the knowing assistance of BankSA which is alleged to have contravened various provisions in the Trade Practices Act 1974 (Cth), the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth), to have breached contracts with consumers and to have been negligent.

4    The privilege dispute arises out of an interlocutory application by BankSA to summarily dismiss or permanently stay the class action. It issued subpoenas to GMG Legal Services Pty Ltd trading as Griffins Lawyers (Griffins), then the lawyers for the appellants and class members, LCM Litigation Fund Pty Ltd (LCM), the litigation funder of the class action, and Nicholas Cooper, Mr Samra’s trustee in bankruptcy (Trustee). Those parties claimed legal professional privilege over numerous documents in nine boxes of documents which were produced in response to the subpoenas. For some of the relevant period Mr Griffin was a principal in the law firm, Griffin Hilditch, rather than of its successor, Griffins Lawyers, but for convenience we usually describe both firms as “Griffins”.

5    The primary judge refused the claims of privilege in relation to documents which came into existence and record, or are, communications before 30 June 2013 but allowed the claims in relation to communications after that date. The central question in the appeal is whether the primary judge erred in concluding that documents created by Griffins in the preparatory stages of the class action and maintained on the firm’s file, before any of the investors had entered into a formal retainer agreement with the firm or signed a litigation funding agreement, did not attract legal professional privilege under either the “legal advice” or “litigation” heads of privilege.

6    The cross-appeal concerns whether the primary judge erred in rejecting BankSA’s contention that documents which came into existence and record, or are, communications between 1 November 2011 and 30 June 2013 do not attract privilege, because there is a “colourable case” that they came into existence in furtherance of an abuse of process for two separate but interrelated reasons:

(a)    that examinations conducted under s 81 of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) in relation to Mr Samra’s bankruptcy (bankruptcy examinations) were conducted in the name of the Trustee but were in fact used by the Trustee’s then solicitors, Griffins, for the purpose of Griffins (itself) investigating and procuring evidence for a potential claim against BankSA on behalf of the appellants and other investors, with the consequence that the power was abused; and/or

(b)    Griffins’ collateral use in the class action of documents produced by BankSA in the bankruptcy examinations, to investigate claims in its own right or potentially for investor clients, constituted a breach of the implied undertaking.

7    For the reasons we explain we have made orders to allow the appeal and dismiss the cross-appeal.

B.    THE EVIDENCE

8    In the hearing below, the parties relied on the following affidavits together with their annexures, and the same material is before us in the appeal:

(a)    for the appellants:

(i)    an affidavit of Antoinetta Vozzo, a partner of Johnson Winter & Slattery, the solicitors for the appellants, sworn 21 April 2015, together with Annexure “AV-1”;

(ii)    two affidavits of Mr Griffin, sworn 25 February 2015, together with Annexure “GMG-1” (First Griffin Affidavit) and 21 April 2015 (Second Griffin Affidavit);

(iii)    an affidavit of Moreno Ferluga sworn 30 April 2015;

(iv)    an affidavit of Wendy Jones, a partner of Fisher Jeffries, BankSA’s solicitors, affirmed 24 December 2014, together with annexures (First Jones Affidavit); and

(v)    an affidavit of Matthew Elson, a solicitor with Fisher Jeffries, sworn 6 May 2015.

(b)    for the Trustee, three affidavits of Thomas Burke, a solicitor with Norman Waterhouse Lawyers, the Trustee’s solicitors, sworn 31 March 2015, 21 April 2015 and 1 May 2015; and

(c)    for BankSA, the affidavits relied on by the appellants and the Trustee, as well as a further affidavit of Ms Jones affirmed 23 April 2015.

9    Ms Vozzo stated that she, together with another solicitor with Johnson Winter & Slattery and Scott Evans of counsel, reviewed the documents produced in answer to the subpoenas for the purpose of articulating and particularising the claims for legal professional privilege and that those claims are set out in a schedule which is Annexure “AV-1” to her affidavit. That schedule was then re-engrossed with consecutive document numbers by BankSA’s solicitors and annexed as Annexure “WAJ17” to the First Jones Affidavit (the Privilege Schedule).

10    The Privilege Schedule lists and identifies approximately 2,149 documents which are the subject of the appellants’ claims of privilege and states whether BankSA objects to the claim. It provides a brief description of the nature of each document, its date, provenance and the basis of the privilege claim (the document description) sufficient to permit a meaningful testing of the claims to privilege: see Kadlunga Proprietors v Electricity Trust of South Australia (1985) 39 SASR 410 at 415-416 (White J with whom King CJ and Millhouse J agreed).

11    For the hearing at first instance, BankSA’s solicitors filed a Notice of Grounds of Opposition (Notice of Opposition). It set out five grounds of objection to the privilege claims made by the appellants and three grounds of objection to the privilege claims made by the Trustee, with eight annexures (being schedules extracted from the Privilege Schedule) listing and identifying the documents relevant to each of the eight grounds of objection. The primary judge dealt with the issues in the case by reference to the Notice of Opposition and the numbered annexures.

12    Before the primary judge, the appellants handed up a schedule, extracted from the Privilege Schedule, which lists 58 documents recording communications between Griffins and investors in October and November 2009 (the Example Documents Schedule) and copies of those documents in a paginated volume (the Example Documents).

13    The appellants informed the primary judge that, while the Example Documents Schedule was more readily “digestible” than the Privilege Schedule, they were “more than happy” for the primary judge to examine all the disputed documents, and they did not contend that the primary judge should confine his examination to just the Example Documents. All documents in respect of which disputed claims of privilege were made (the disputed documents) were before the primary judge and available for inspection.

The further material in the appeal

14    In the appeal the appellants filed a further affidavit of Ms Vozzo sworn 19 May 2016 which annexes three reorganised schedules of documents extracted from the Privilege Schedule. The three reorganised schedules are:

(a)    the Counsel Documents Schedule - which lists approximately 96 documents relating to work undertaken by Griffins for the purpose of seeking advice from counsel;

(b)    the Client Documents Schedule - which lists numerous documents recording communications between Griffins and investors, broken down on an investor by investor basis; and

(c)    the Client Lists Schedule - which lists documents recording lists of investors made by Griffins.

15    The appellants invited us to consider these reorganised schedules, and also to inspect four of the documents listed in the Counsel Documents Schedule (documents 189, 1068, 2041 and 2080).

16    After hearing the appeal we directed the parties to prepare two further schedules extracted from the Privilege Schedule which list and identify each document in respect of which the primary judge:

(a)    refused the claim of privilege and which is relevant in the appeal. (This list also highlights the documents relevant in the cross-appeal); and

(b)    upheld the claim of privilege and which is relevant in the cross-appeal;

together with copies of those documents. To assist in determining the issues in the appeal and cross-appeal we have inspected most of these documents, which comprise seven lever arch binders.

BankSA’s opposition to “further” material being received

The Client Documents Schedule, the Client Lists Schedule and the Counsel Documents Schedule

17    The three reorganised schedules are just extracts from the Privilege Schedule and list some subsets of the disputed documents, which themselves were before the primary judge. They are not further evidence and they are easier to use than the full Privilege Schedule. It is appropriate that we have regard to them.

The Example Documents

18    BankSA submitted that we should not inspect the Example Documents. It argued that the primary judge had a discretion whether to inspect those documents and did not err in not doing so. It said that there were sound reasons for the primary judge not to inspect those documents when BankSA had been denied access to them, even in order to make submissions in regard to them, and they were only a small subset of the disputed documents. It contended that the appellants did not establish an error in the exercise of discretion of the type described in House v R (1936) 55 CLR 499 (House v King) at 504-505 (Dixon, Evatt and McTiernan JJ).

19    BankSA further argued that, even if the primary judge erred in not inspecting the Example Documents, it would not have changed the outcome of the dispute. It argued that the primary judge took into account that Griffins had meetings with investors from October 2009 and received information from them in October and November 2009, and that his Honour characterised the firm’s activities in that period merely as the assembly of material to enable development of a litigation funding proposal rather than for reasonably anticipated litigation.

20    BankSA contended that the purpose of such an inspection is to resolve the veracity of the claims of privilege over the documents which are the subject of inspection: Grant v Downs (1976) 135 CLR 674 (Grant v Downs) at 677 per Barwick CJ and at 688-9 per Stephen, Mason and Murphy JJ; AWB Ltd v Cole (No 5) (2006) 155 FCR 30; [2006] FCA 1234 at [44](12) (AWB v Cole No 5) (Young J). It argued that it is impermissible for the Court to exercise the power to inspect some documents so as to make factual findings about other documents as though that is a substitute for evidence. It also said that there is no sound basis to draw inferences about the relationship between Griffins and the investors in the period from 2010 to 30 June 2013 by reference to a small subset of documents confined to a period in late 2009, which were likely to have been carefully selected by the appellants for forensic reasons. It submitted that if the Court was minded to examine the Example Documents we should inspect all the disputed documents rather than draw inferences from just a small subset.

21    The appellants handed up the Example Documents Schedule to the primary judge on the basis that it was “more digestible” than the full Privilege Schedule and said that the documents in the schedule went to two key issues: (a) the meeting of investors at Griffins’ offices on 1 October 2009; and (b) the taking of instructions from investors by Griffins in the months of October and November 2009. The thrust of the appellants’ submission was that the documents demonstrated one of the appellants’ key contentions – that, from the very start of the relationship between Griffins and the investors, the firm was advising investors about prospective litigation.

22    The appellants handed up the Example Documents and specifically invited the primary judge to examine them. It is unquestionable that the primary judge had a discretion do so: Grant v Downs at 677, 688-9; Esso Australian Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49; [1999] HCA 67 (Esso) at [52] per Gleeson CJ, Gaudron and Gummow JJ. It is clear that the primary judge preferred not to inspect the documents. His Honour said:

…to save me coming back and asking for it if I choose to, and I will be able to give it back to you, hopefully, in a sealed state when I give a ruling on this application… hopefully, it goes back to you unopened. That would be my first ambition if it’s possible.

23    In circumstances where the primary judge hoped not to inspect the Example Documents, did not say that he inspected any of the disputed documents (or even just the Example Documents), and made no specific or even general reference to the contents of any of the disputed documents, we infer that his Honour did not examine any of them. BankSA did not submit to the contrary.

24    It is appropriate for the Court to examine the Example Documents when:

(a)    they are relevant to the determination of issues in the appeal and we should be in the same position as the primary judge. We should not be hesitant to exercise the power to examine documents to resolve a privilege dispute: Esso at [52];

(b)    BankSA made no objection to them being handed up to the primary judge nor any objection to counsel’s invitation to the primary judge to inspect them. They are just a subset of the disputed documents available for inspection by the primary judge and by us; and

(c)    there is no merit in BankSA’s contention that the decision of the primary judge not to inspect the Example Documents made no difference to his Honour’s findings. We are satisfied that, had his Honour inspected the documents, it is quite unlikely that he would have made the findings that his Honour did (at [87] and [89]).

25    We do not accept that it is impermissible or necessarily unsound to inspect the Example Documents and to draw inferences from that subset of documents about the relationship between investors and Griffins in the period from 2010 to mid-2013. The nature of the relationship between investors and Griffins at the commencement of their dealings is likely to be material in deciding the nature of their relationship at later stages. The knowledge obtained by inspecting some documents may inform a contextual understanding of other documents and the surrounding circumstances. Before us, the appellants provided copies of the Example Documents to counsel for BankSA and it was therefore in a position to make submissions as to what inferences should be drawn.

26    Even so, because we have not restricted our examination to just the Example Documents, little turns on this issue. While the Example Documents are of assistance, we have not drawn inferences based only on them.

The Counsel Documents

27    BankSA also submitted that we should not inspect four documents from the Counsel Documents Schedule. It argued that those documents were not relied upon by the primary judge and there is no application to adduce fresh evidence, and it reiterated the submissions it made in relation to the Example Documents.

28    It is appropriate for the Court to inspect the four Counsel Documents. They are plainly relevant to the determination of the issues in the appeal being described in the Privilege Schedule as follows:

(a)    a document dated 13 November 2009 – described as “Griffins file note re class action and of meeting with Patrick Coope [a representative of LCM], counsel” and as “Counsel advice” and “Privileged information provided to a proposed funder to enable it to decide whether to fund a Claim”;

(b)    a document dated 13 November 2009 – described as “Griffins file note dictated by Lucy Travers [a solicitor with Griffins] re attendance on Counsel” and as “Communications between Counsel and Griffins relating to Counsel advice”;

(c)    a document dated 13 November 2009 – described as “Griffins File Note re conference with Counsel, Patrick Coope, Greg Griffin, Adam Coombe and Lucy Travers” and as “Counsel advice”, “Communications between Counsel and Griffins relating to Counsel advice” and “Privileged information provided to a proposed funder to enable it to decide whether to fund a Claim”; and

(d)    a document dated 4 November 2009 – described as “Greg Griffin letter to Counsel re: “Possible Class Action” seeking advice” and as “Communications between Counsel and Griffins relating to Counsel advice” and “Privileged information provided to a proposed funder to enable it to decide whether to fund a Claim”.

29    It is inapposite to describe these documents as fresh evidence when they are just a subset of the documents which were available for inspection by the primary judge. We do not accept that we should not examine them because the primary judge did not do so, particularly when (as we explain) we consider the primary judge erred in declining to examine them. Nor do we accept that it is impermissible or necessarily unsound to examine these documents and to draw inferences from them. The appellants provided the documents to counsel for BankSA and it was in a position to make submissions as to the inferences to be drawn. Again, not much turns on this because we have examined the disputed documents and did not restrict our examination to these four documents. We have not drawn inferences based just on them.

C.    THE FACTS AND PROCEDURAL HISTORY

30    We have drawn our account of the facts from the affidavits relied on by the parties, and to a limited extent from our inspection of the disputed documents. None of the deponents were cross-examined and the primary judge proceeded on the basis of the reliability of the primary facts asserted. We take the same approach.

The ALC private lending business

31    For some years prior to August 2009, the Samra entities conducted a “private lending” business known as “Adelaide Lending Centre”. The business operated by seeking monies (whether described as loans, deposits or investments) from private individuals, and then using those funds to make short-term loans to third parties engaged in construction projects or property development projects, usually in and around Adelaide. The Samra entities banked with and had overdraft facilities with BankSA.

August 2009 - the collapse of the Samra entities

32    On 20 August 2009, the Supreme Court of South Australia ordered that ALC, one of the entities through which the lending business operated, be wound up and that Stephen Duncan and Christopher Powell of the insolvency firm KordaMentha be appointed as liquidators. On 28 August 2009, Mr Duncan and Mr Powell were also appointed receivers and managers of Mr Samra’s family trust trading as Adelaide Lending Centre.

October 2009 - Griffins commences to investigate a class action against BankSA and the Samra entities

33    Many individuals who had advanced monies to the private lending business (who we describe as investors) lost substantial monies as a result of the collapse of the Adelaide Lending Centre lending business. The materials indicate that their combined losses exceed $70 million.

34    In about August 2009, Griffins was retained by one of the investors, Mr Rozkalis, for the purposes of bringing an action against Mr Samra and others, and obtained a default judgment in his favour.

35    In about September 2009, Mr Duncan conducted a meeting of creditors of ALC which Mr Griffin attended. Mr Duncan informed the meeting that he was not in a position to pursue any claim against BankSA as he had a commercial relationship with the bank and was therefore in a position of conflict.

36    At the conclusion of that meeting, a group of investors who knew that he was a solicitor approached Mr Griffin and sought that he assist them to recover the monies they had lost. As a result of that approach, Mr Griffin convened a meeting of investors at the offices of Griffins on 1 October 2009 to discuss legal avenues for the recovery of their losses. As we later explain in more detail, the evidence shows that from 1 October 2009 Griffins commenced to investigate a possible class action by investors against BankSA and the Samra entities.

March 2010 - Mr Samra’s bankruptcy

37    Mr Samra declared himself bankrupt on 3 March 2010. Griffins then acted for one of the investors, Mr Rozkalis, in seeking annulment of the bankruptcy order and filing a creditor’s petition for bankruptcy.

38    On 6 August 2010 the earlier bankruptcy order was annulled. Mr Samra was declared bankrupt on Mr Rozkalis’ petition and Mr Cooper was appointed as Trustee. Upon his appointment Griffins commenced to act for the Trustee.

December 2011 - the bankruptcy examinations commence

39    On a date in 2011 which is not clear, the Trustee sought and was granted leave in the Federal Magistrates Court (FMC) to issue a summons for examination (examination summons) and production of documents to Mr Samra pursuant to s 81 of the Bankruptcy Act. Griffins acted for the Trustee in seeking the examinations summons and in the subsequent examinations. In December 2011, Mr Samra was examined and he produced documents.

40    On 21 March 2012, the Trustee sought leave of the FMC to issue examination summonses to Simon Finch, the relationship manager for Mr Samra at BankSA, and to BankSA to produce documents relating to its dealings with ALC, Adelaide Lending Centre and the bankrupt. The Trustee swore an affidavit in support of the application dated 21 March 2012 in which he stated his purpose in seeking the examination summons. We set out his evidence in that regard when dealing with the cross-appeal. The FMC granted leave to issue the examination summons on 22 March 2012. On 14 August 2012, the Trustee sought and obtained leave to issue an examination summons to Mr Finch’s superior at BankSA, Robert Sporton.

41    In correspondence between lawyers for the parties, the breadth of the summons for production of BankSA documents was refined. On 7 May 2012, BankSA duly produced documents to the FMC and again on 11 July 2012. Mr Finch was examined on 10 May 2012 and Mr Sporton was examined on 6 November 2012.

November 2014 - commencement of the class action

42    On 14 November 2014, Griffins filed the originating application and statement of claim in the class action, both signed by Mr Griffin. The proceeding was served on BankSA on 12 December 2014.

December 2014 - the application to dismiss or stay the proceeding

43    On 24 December 2014, BankSA filed an interlocutory application seeking orders for summary dismissal, in the alternative the permanent stay of the proceeding, and in the further alternative a permanent restraint on Griffins acting in the class action. The application alleged that:

(a)    documents were sought and produced by BankSA in answer to an examination summons in the bankruptcy examinations, issued on the application of the Trustee for whom Mr Griffin acted, but which improperly sought documents as an aid to litigation that was in contemplation by the appellants and other investors for whom Mr Griffin also acted; and/or

(b)    Griffins misused those documents in contravention of the Harman undertaking because the firm – which was at relevant times acting both as solicitors to the Trustee and for the appellants and other investors – deployed the documents produced by BankSA in furtherance of the litigation by the appellants and other investors for their separate ends.

To a significant extent the application is based in the assertion that Griffins acted for the appellants and other investors at the same time as the firm was acting for the Trustee in the bankruptcy examinations.

44    Without making any admission of wrongdoing, Griffins voluntarily ceased to act for the appellants a short time after BankSA filed the application. Johnson Winter & Slattery commenced to do so.

February 2015 - the First Griffin Affidavit

45    In the First Griffin Affidavit (made on 25 February 2015), Mr Griffin said that Griffins was retained upon the Trustee’s appointment on 6 August 2010. He said that he acted for the Trustee in what he called the “Samra Bankruptcy Proceeding” which he said was conducted over the period from August 2011 until July 2013.

46    Mr Griffin said that during the Samra Bankruptcy Proceeding (i.e. between August 2011 and July 2013) Griffins was not “retained to act” by investors in regards to the present class action. He said:

17.1    Whilst I first met with some of Mr Samra’s creditors and investors in 2009 soon after the collapse of the “Adelaide Lending Centre” business on about 6 August 2009, I was not then retained to act in regards a representative proceeding or in any proceedings against BankSA.

17.2    My firm did act in limited respects for individual investors in regards their dealings with Mr Samra. For example in or around August 2009 my firm advised an investor in the “Adelaide Lending Centre” business who was considering noting a caveat against the property of the Samra entities, and at about the same time for another investor who commenced Supreme Court proceedings against Mr Samra.

17.3    From time to time after August 2009 my firm:

17.3.1    spoke to investors, both individually and sometimes together, with a view to considering possible claims they may have; and

17.3.2    acted in discrete matters for individual investors in relation to the wider Samra matter.

March 2015 – the issue of subpoenas to produce documents

47    On 4 March 2015, BankSA issued subpoenas seeking production of documents by Griffins, the Trustee and LCM. Griffins, the Trustee and LCM applied to set aside the subpoenas.

48    On 8 April 2015, White J refused to set aside the subpoenas: see Perazzoli v BankSA [2015] FCA 373.

April 2015–the Second Griffin Affidavit

49    It was in this context that Mr Griffin swore the Second Griffin Affidavit (on 21 April 2015). The relevant thrust of his evidence was that from 1 October 2009 until about 30 June 2013, although Griffins was not formally retained by any of the investors, Griffins and the investors had the requisite relationship of trust and confidence such that it was appropriate to imply that they were solicitor and ‘client’. He said:

Communications with Investors

7.    In August 2009 I attended a meeting of creditors of the Fourth Respondent in this proceeding, ALC Group Pty Ltd (ALC). I know ALC to be the corporate entity through which Mr Samra operated his “Adelaide Lending Centre” business. Mr Stephen Duncan as one of ALC’s liquidators, chaired the meeting. At the meeting, Mr Duncan said words to the effect that he would not be able to cause ALC to bring proceedings against the First Respondent (BankSA) as he had a commercial relationship with BankSA and was in a position of conflict.

8.    At the conclusion of this meeting, I was approached by a number of investors who knew that I was a solicitor. They asked me to assist them to recover the moneys which they had lost with Mr Samra and his business. I believe that this was as a result of Mr Duncan’s stated inability to pursue BankSA.

9.    As a result of that approach, I convened a meeting of investors at my firm’s offices a few weeks later. That meeting was convened because I was a solicitor and I wanted to discuss with investors potential legal avenues of recovery of their losses. The meeting was convened by me in my professional capacity as a solicitor.

10.    To my knowledge, each of the investors who attended at my offices knew I was a solicitor and that my firm was a legal practice. I handed out my Griffins Lawyers business card to investors at the meeting. I assumed that those investors attending were doing so on the basis that they wished to discuss their legal options, to receive legal advice, and to consider retaining my firm as lawyers should any legal action prove possible in the future. No investor said anything to me to the contrary at that meeting or at any other time. I considered at the time, and consider now, that I was dealing with the investors in my professional capacity as a solicitor.

11    The meeting was conducted on a confidential basis, in that it was not open to the public or any person who had not lost moneys in Mr Samra’s business (with the exception of spouses, and directors of companies who had lost moneys). I asked the attendees to keep the matters discussed at the meeting confidential. Other than this, I am not able to disclose the content of the matters discussed at that meeting due to legal professional privilege.

12.    After that meeting, and as I depose in paragraphs 17.2 and 17.3 of my first affidavit, my firm acted in discrete matters for individual investors in regards their dealings with Mr Samra, and my firm continued to speak with investors, both individually and sometimes together, with a view to considering possible claims they may have.

13.    In the matters, meetings and communications with those investors to which I refer in the preceding paragraph, I was at all times acting in my professional capacity as a solicitor, as were my staff members who assisted me. Those matters, meetings and communications were confidential and, I respectfully assert, subject to legal professional privilege. Despite not having a formal retainer with the investors, other than those for whom I acted in discrete matters, all investors were dealing with me as a solicitor and had the manifest intention of seeking legal advice or legal services in relation to their losses.

14.    From time to time, my staff and I created documents and made copies of other documents to assist in our consideration of the possible legal claims of investors and so that we might provide legal advice to investors. We also asked investors to make copies of relevant documents to give to my firm. The purpose of creating those documents and making those copies was the possible legal proceedings to be brought by investors and recover lost moneys and for the provision of legal advice in respect of such claims. Those documents and copy documents were held by my firm on a confidential basis.

50    Mr Griffin was not challenged on his evidence. His evidence is not entirely satisfactory because he put somewhat different positions in his two affidavits. Relevantly, the thrust of his first affidavit was that prior to 30 June 2013 he was not retained to act for the investors in the proposed class action, and in the second affidavit that he nevertheless had the requisite relationship of trust and confidence with the investors for a solicitor and ‘client’ relationship to be inferred. The difference probably arose because Mr Griffin was sensitive to BankSA’s broad suggestion of impropriety in his having acted for both the Trustee and for the investors. In our view, Mr Griffin tried to dance on the head of a pin as to whether he acted for the investors and as a result his evidence was unnecessarily opaque.

51    As we later explain, it is plain on the evidence (including our examination of the disputed documents) that from 1 October 2009 until 30 June 2013 (and continuing), although none of the investors who consulted with Griffins signed a retainer agreement with the firm, Griffins stood in a relationship of trust and confidence with them such that it is appropriate to infer a lawyer and ‘client’ relationship. We consider the Second Griffin Affidavit correctly sets out the position.

Mr Ferluga’s evidence

52    Mr Ferluga, the second appellant, swore an affidavit on behalf of himself, his wife, his father and two companies of which he was a director (the Ferluga entities). He said that:

(a)    he was interested in becoming involved in an action against BankSA and the Samra entities as the Ferluga entities had advanced approximately $1 million to the Samra entities;

(b)    in about August or September 2009, along with other investors who had advanced monies to the Samra entities, he attended the offices of the legal firm Duncan Basheer Hannon and met with a partner of the firm, Peter Humphries, to discuss possible legal action against BankSA and the Samra entities. Mr Humphries advised that Duncan Basheer Hannon was not willing to act in a class action against BankSA but may be able to assist investors in pursuing individual claims. Mr Ferluga was not willing to pursue an individual claim because of the legal costs involved;

(c)    shortly after that meeting he was informed (he believes by another investor) that Mr Griffin was potentially interested in pursuing an action against BankSA and the Samra entities for the benefit of investors;

(d)    he knew that Mr Griffin was a solicitor and he contacted and spoke to Mr Griffin in Mr Griffin’s professional capacity;

(e)    on 1 October 2009, along with other investors who had advanced monies to the Samra entities, he attended the Griffins’ offices and met with Mr Griffin. He intended and believed that his communications at the meeting with Mr Griffin and other investors were confidential and subject to legal professional privilege;

(f)    on 6 October 2009, he received a telephone call from Mr Adam Coombe, a solicitor employed with Griffins. His purpose in that and subsequent communications with Griffins was to discuss legal options for the recovery of losses arising from his dealings with the Samra entities, to receive legal advice, and to consider retaining Griffins should any legal action prove possible. During the telephone call, Mr Ferluga discussed matters relating to his potential claims with Mr Coombe and made arrangements to meet the following day so he could provide further instructions and receive Griffins’ advice about his legal options. In particular, he sought Griffins’ advice about the possibility of the Ferluga entities participating in any action pursued on behalf of the investors in the Samra entities. He claimed that those communications are subject to privilege;

(g)    on 7 October 2009, Mr Ferluga again attended the Griffins office and met with Mr Coombe. He provided confidential instructions to Griffins and agreed to provide copies of relevant documents for the firm to consider so he could be provided with legal advice. He claimed that those communications are subject to privilege;

(h)    between October 2009 and February 2015 (when Griffins ceased to act for the appellants), Mr Ferluga provided the firm with instructions and documents relating to the Ferluga entities’ dealings with the Samra entities for the purposes of advancing the preparation of litigation against BankSA and the Samra entities, and seeking legal advice from Griffins about their claims against those parties;

(i)    he regarded the Ferluga entities as clients of Griffins notwithstanding that they did not enter into a written retainer agreement with the firm;

(j)    he understood that any litigation would involve a two-stage process. The first stage involved Griffins investigating the potential action, seeking litigation funding or having investors pool their own funds to fund an action. Assuming litigation funding was secured, the second stage involved entering into litigation funding agreements and pursuing the claims; and

(k)    he signed a litigation funding agreement with LCM in about June 2013 and the other Ferluga entities followed in June 2014 and November 2014. The litigation funding agreements appointed Griffins as the solicitors for the Ferluga entities in the litigation.

Mr Ferluga was not challenged on this evidence.

Communications with a litigation funder

53    In his first affidavit, Mr Griffin said that in late 2009 he spoke informally with LCM about the possibility of it funding proceedings proposed to be brought by investors. He said that “[a]part from sporadic and general discussions, no agreements or funding commitments were made with the Funder. No funding agreement was entered into.”

54    In his second affidavit, Mr Griffin said that he also had discussions with another litigation funder, IMF Litigation Funding (IMF). He said that Griffins’ communications with both LCM and IMF were:

…for the purposes of the funding of potential legal proceedings, and ultimately this representative proceeding (no funding was sought for the bankruptcy examinations). The documents brought into existence in relation to my communications with litigation funders were created for the sole purpose of this proceeding and the funding thereof. All of those communications with litigation funders were confidential. I believe that LCM and IMF have maintained the confidential nature of our communications.

55    Our inspection of the documents shows that Mr Griffin sought the involvement of LCM in a proposed class action against BankSA from an early date. He invited Mr Coope, a representative of LCM, to attend the meeting of investors on 1 October 2009 and Mr Coope outlined the likely funding terms to the investors present. Although there were numerous interactions between Griffins and LCM thereafter, LCM did not finally commit to provide litigation funding for the class action until mid-2013.

56    Mr Griffin said that, in 2014, LCM requested that junior counsel be retained to draw class action pleadings and that senior counsel be retained to advise on prospects. He said that advice was not provided until September 2014. However, the Counsel Documents show that senior counsel provided advice on prospects in November 2009, and further advice at later points.

D.    THE APPEAL

57    The Amended Notice of Appeal sets out two broad grounds of appeal, under the headings “advice privilege” and “litigation privilege” and we deal with the appeal by reference to those broad grounds.

58    We reiterate that the primary judge dealt with the privilege claims by reference to a numbered item in the Notice of Opposition and a numbered Annexure listing and identifying the documents subject to that objection.

(a)    Item 1 set out an objection to the claims of privilege in respect of all documents in Annexure 1 to the Notice of Opposition, on the basis that there was no solicitor/client relationship between the appellants or other investors and Griffins prior to 30 June 2013;

(b)    Item 2 set out an objection to the claims of privilege in respect of all documents in Annexure 2 to the Notice of Opposition, on the basis that there was no real prospect of litigation prior to 30 June 2013;

(c)    Item 3 set out an objection to the claims of privilege in respect of documents in Annexure 3 to the Notice of Opposition, in the alternative to Items 1 and 2, on the basis that, in respect of documents recording communications in the period from 1 November 2011 until 30 June 2013, there was a colourable case that the communications were made in furtherance of an abuse of process, and privilege therefore did not attach;

(d)    Item 4 set out an objection to the claims of privilege in respect of documents in Annexure 4, in further alternative to Items 1, 2 and 3, on the basis that the appellants did not meet their onus to discharge the dominant purpose test; and

(e)    Item 5 set out an objection to the claims of privilege in respect of documents in Annexure 5 on the basis that they were not confidential. BankSA no longer maintains this ground.

59    The same document may be listed under multiple items. For example, a document may be subject to a claim of litigation privilege under Item 2 and also subject to a claim of advice privilege under Item 1. If privilege is allowed under either item then the document may be subject to the objection that it was made in furtherance of an abuse of process under Item 3 or the objection that the appellants failed to satisfy their onus to discharge the dominant purpose test under Item 4.

E.    LITIGATION PRIVILEGE

60    The appellants state that if the claims under this head of privilege are accepted, privilege attaches to all but approximately 30 of the disputed documents.

61    Under Item 2 of the Notice of Opposition, BankSA described their opposition to the claims of litigation privilege as follows:

Further and in the alternative, insofar as the claim for privilege is based upon litigation privilege, the applicants and Group Members have failed to discharge their onus of establishing that there was a real prospect of litigation at any time prior to 1 July 2013. If this is accepted then each of the claims identified in Annexure 2 hereto will be disposed of.

The primary judge’s reasons

62    The primary judge found (at [86]) that the documents which recorded communications prior to 30 June 2013 did not attract litigation privilege because “on the evidence, such documents are not shown to have been created for the dominant purpose of existing or anticipated litigation”. His Honour said (at [87]) that he took the approach taken in Ensham Resources Pty Ltd v AIOI Insurance Company Ltd (2012) 209 FCR 1; [2012] FCAFC 191 (Ensham Resources) at [53]-[57] (Lander and Jagot JJ) and applied the test propounded in Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority (2002) 4 VR 332; [2002] VSCA 59 (Mitsubishi) at [19] per Batt JA (with whom Charles and Callaway JJA relevantly agreed), and concluded that for communications before 30 June 2013 “the evidence does not demonstrate a real prospect of litigation, as distinct from a mere possibility”.

63    The primary judge’s reasons at [87] and [89] are central in relation to the appeal on litigation privilege. The primary judge said (at [87]) that it was only on about 30 June 2013 that “the spasmodic communication between the applicants and other group members and [Griffins] became sufficiently focused as to demonstrate a real prospect of litigation.” His Honour said that before 30 June 2013:

There is no evidence to demonstrate a coherent and cogent assembly of relevant documentary material, the taking and recording of statements of potential witnesses, the drawing of any briefs for the getting of advice about the prospects of a claim such as the present being pursued, the provisional engagement of any appropriate expert witnesses, or indeed any material plan for the collation of, or the assessment of, information and possible witness statements before about that time. The funding agreement in June 2013 did not apparently authorise the proceeding, but the coherent assembly of material, the preparation of draft pleadings and the advice of counsel, upon which LCM was then to determine whether it would fund the proposed claim. The funding agreement is not in evidence, so I have inferred that from the course of events.

(Emphasis added)

64    His Honour said (at [89]):

The prospect of litigation was until at least 30 June 2013 merely an idea of a possibility, without any real decision to pursue the coherent investigation of such a claim having been made. It was no more than a vague prospect depending on funding availability for proper investigation and the procuring of advice about the prospects of success of such a claim.

(Emphasis added)

65    The primary judge accepted (at [88]) that from an early date Mr Ferluga, at least, wanted to explore the prospects of bringing a claim against BankSA and others but did not accept that the evidence of the communications by Griffins with him (or other investors) until about mid-2013 indicated that there was a real prospect of litigation such as the present case.

66    Consequently, the primary judge concluded that the documents recording communications made before 30 June 2013 which rely only on litigation privilege in Annexure 1 and as listed in Annexure 2 did not attract legal professional privilege. His Honour said that the documents listed in Annexure 2 were not protected from inspection by BankSA.

The grounds of appeal

67    The Amended Notice of Appeal alleged:

Litigation Privilege

2.    The learned Judge erred in law by failing to correctly apply the test to determine whether documents brought into existence in the period 1 October 2009 to 30 June 2013 were the subject of litigation privilege:

2.1    On the findings before the Court (Reasons [19], [40]-[41], [47]-[48], [56]-[65], [69]-[71], [75], [81], [87]-[89], [93], [97], [106], [129]-[150], [156], [174] and [179]) the learned Judge should have concluded that there was a real prospect of litigation from 1 October 2009, together with an assembly of relevant documentary material, the taking and recording of statements of potential witnesses, and the drawing of briefs for the getting of advice about the prospects of a claim from counsel from October 2009.

3    The learned Judge erred in concluding that the evidence and materials before him did not demonstrate a real prospect of litigation, as distinct from a mere possibility, from 1 October 2009.

4    The learned Judge erred in finding that there was no evidence or materials before him to demonstrate a coherent and cogent assembly of relevant documentary material, the taking and recording of statements of potential witnesses, and the drawing of briefs for the getting of advice about the prospects of a claim from counsel from October 2009.

5    The learned Judge erred in not exercising his undoubted discretion to examine any of the documents the subject of the privilege claim (particularly the documents placed in a sealed envelope by his Honour as referred to at line 30 on page 11 to line 39 on page 12 of the transcript of the hearing on 22 May 2015 - copy attached) as part of the process of determining whether the documents in question were privileged.

68    The essence of the appeal is the allegation that the primary judge erred in finding that there was no real prospect of litigation from 1 October 2009 until 30 June 2013, and therefore that documents which came into existence and record, or are, communications before 30 June 2013 do not attract litigation privilege.

Relevant principles

69    It is common ground between the parties that the primary judge correctly stated the principles in relation to litigation privilege.

70    The primary judge said (at [28]) that for a communication to be protected by litigation privilege it must be made for the dominant purpose of actual, “reasonably apprehended” or “reasonably anticipated” litigation. In order for litigation to be “reasonably apprehended” or “reasonably anticipated”, there must be a “real prospect” of that litigation, as distinct from a mere possibility, but it does not have to be more likely than not: see Mitsubishi at [19]; Ensham Resources at [53]-[57]; Australian Competition and Consumer Commission v Yazaki Corporation [2014] FCA 1316 (Yazaki) at [30]-[33] per Besanko J. Whether litigation is “reasonably anticipated” is “fact-sensitive”: Yazaki at [38].

71    The party claiming legal professional privilege bears the onus of satisfying the Court that a communication is subject to privilege. The primary judge explained (at [29]) that the existence of legal professional privilege is not established simply by using a verbal formula, by mere assertion that privilege attaches to a particular communication, or that communications are undertaken for the dominant purpose of use in actual or reasonably anticipated legal proceedings. 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 topic to which the communications were directed: AWB v Cole No 5 at [44](3). Some authorities refer to a requirement for “focused and specific” evidence as to the purpose of the communication: Barnes v Federal Commissioner of Taxation (2007) 242 ALR 601; [2007] FCAFC 88 (Barnes) at [18] (Tamberlin, Stone and Siopis JJ).

72    A ‘dominant purpose’ is one that predominates over other purposes; it is the prevailing or paramount purpose: Federal Commissioner of Taxation v Pratt Holdings Pty Ltd (2005) 225 ALR 266; [2005] FCA 1247 at [30] (Kenny J); The test is objective and requires consideration of all the facts and circumstances: Grant v Downs at 682 and 685 per Stephen, Mason and Murphy JJ; Ensham Resources at [52]; Yazaki at [34].

BankSA’s contentions

73    BankSA submitted that the appeal invites the Court to undertake a wholesale reconsideration of the evidence including by reference to: (a) the evidence of Mr Ferluga and Mr Griffin; (b) the objective surrounding circumstances; (c) the document descriptions in the Privilege Schedule; and (d) the Example Documents.

74    It relied upon asserted intermediate findings of fact by the primary judge that:

4.1    from about late 2009, at the instigation of Mr Griffin (a principal at GMG), and not on behalf of investors, GMG had “sporadic and general discussions” with litigation funders, including LCM Litigation Fund Pty Ltd (LCM), about funding a potential claim against the Bank, but no funding commitment was made until mid-2013;

4.2    the “unequivocal” evidence of Mr Griffin should be accepted that he had not been retained to institute or conduct proceedings against the Bank by the Appellants or any group member until 31 July 2013, and that his role from late 2009 until July 2013 was to act in limited respects for individual investors in relation to Samra-related matters;

4.3    prior to mid-2013 when litigation funding was procured, the Appellants had not established that GMG’s communications with investors and litigation funders were pursuant to any retainer or for any client with whom GMG had a solicitor/client relationship, but instead were consistent with GMG itself exploring the prospect of a funding arrangement for an action such as the present proceeding of its own initiative;

4.4    investors attending spasmodic meetings, or spasmodically communicating with GMG, were hopeful of participating in a class action, but it was left to GMG (acting of its own initiative) to explore an action and the funding thereof with a view to putting a proposal to the Appellants and group members, and (viewed objectively) it was not the intention of the relevant investors to have a solicitor/client relationship until June 2013 when funding was ultimately procured;

4.5    it was only when the funding agreement was procured so as to fund the coherent assembly of material (but not the proceeding itself), that litigation was a real prospect rather than a mere possibility;

4.6    until that time, litigation was no more than a vague prospect depending upon the availability of funding for proper investigation and the procuring of advice about the prospects of success of such a claim;

4.7    it was after funding was procured that: (1) the spasmodic communication between GMG and the Appellants and group members became directed to the pursuit of a claim; (2) a decision was made to pursue the coherent investigation of such a claim; and (3) GMG and the Appellants (and group members) entered a retainer for GMG to investigate, and if appropriate to institute and then prosecute, proceedings; and

4.8    only later, in 2014, in accordance with the requirements of the litigation funder LCM, draft pleadings were prepared and advice was taken from senior counsel.

75    In elaboration of those findings, BankSA submitted that the following matters bear upon whether there was a real prospect of litigation:

81.    On 1 October 2009, Mr Griffin arranged a meeting with a group of investors with a view to discussing a potential claim against the Bank, and the possible engagement of GMG for any future legal action. GMG then had intermittent meetings with investors, both individually and together, with a view to considering possible legal claims that they might have, during which there was the provision of information to GMG.

8.2    The dealings with investors in late 2009 were premised upon the existence of an arrangement with a litigation funder for the funding of any action. Mr Griffin had “sporadic and general” discussions with a litigation funder preceding the first meeting with investors, which were at his own instigation rather than on behalf of investors. Mr Ferluga was only prepared to conduct the proceeding if it was funded.

8.3    By February 2010, LCM communicated its refusal to fund the litigation at that stage. Prior to June 2013, LCM was not provided with any detailed briefing to consider either the funding of the investigation of the claim, or the funding of the claim itself.

8.4    Thereafter, from February 2010 until funding was obtained in June 2013, the communications with investors are sparse, and inconsistent with a solicitor/client relationship relating to the institution of proceedings against the Bank. During that period, only a limited number of investors received any communications. The communications with a limited number of investors, in November 2011 in particular, appear connected with the funding of the bankruptcy examinations.

8.5    In June 2013, after funding was obtained, the spasmodic communication between GMG and the Appellants and group members became directed to the pursuit of a claim, and steps were taken to pursue the investigation of the claim in a meaningful way.

8.6    When this period of nearly 4 years is viewed holistically, there is a clear inference, which the primary judge drew, that the present proceeding was a mere possibility, and would not have been brought, until funding from a litigation funder was secured so as to enable the proper investigation of the potential proceedings, because: (1) GMG spasmodically negotiated with funders over the 4 year period; (2) there was no retainer between GMG and any of the Appellants or group members until they started to enter into funding agreements with LCM in mid-2013; (3) instructions by the Appellants to formulate the claim and to obtain counsel’s advice were only forthcoming after funding was secured; (4) the majority of the communications with investors pre-date the formation of a retainer by 4 years; and (5) there is no other explanation proffered for such a significant delay in the commencement of proceedings.

76    BankSA argued that the evidence of Mr Ferluga and Mr Griffin did not assist the appellants because it did not show that litigation was more than a mere possibility until June 2013. It said Mr Ferluga’s evidence was that:

(a)    his willingness to participate in a claim against BankSA was dependent upon securing litigation funding;

(b)    he attended a meeting with Mr Griffin on 1 October 2009 because he was “interested” in being involved in an action against the Samra entities and/or BankSA; and

(c)    his communications with Griffins in October 2009 were to discuss the “possibility” of the Ferluga entities participating in “any action pursued on behalf of investors who had lost money dealing with the Samra entities”, “should any legal action prove possible in the future.”

77    It said Mr Griffin’s evidence was that:

(a)    he was not retained to act for investors in respect of the present claim against BankSA in 2009;

(b)    he convened the meeting of investors at his office on 1 October 2009 because he “was a solicitor” and he “wanted to discuss with investors potential legal avenues of recovery of their losses”;

(c)    he assumed that investors that attended the meeting wanted “to discuss their legal options, to receive legal advice and to consider retaining [his] firm as lawyers should any legal action prove possible in the future”;

(d)    from time to time after August 2009 he spoke to investors, both individually and sometimes together, with a view to “considering possible claims they may have”;

(e)    no litigation funding was secured until about June 2013, at which point the appellants and class members commenced to enter into funding agreements with LCM;

(f)    between late 2009 and June 2013, Mr Griffin’s discussions with LCM were only “sporadic and general” in nature; and

(g)    it was only at the behest of LCM that, in 2014, after funding agreements had been entered into, junior counsel was retained to draw the pleadings in the present action and senior counsel was retained to advise on the prospects of success.

78    BankSA submitted that the Example Documents are selective and relate only to a confined period in late 2009. In any event, it argued that:

(a)    they go no further than to show (as the primary judge recognised at [59] and [75]) that from time to time after August 2009 Mr Griffin spoke with investors, both individually and in groups “with a view to considering possible legal claims they may have”, and that after the 1 October 2009 meeting, from time to time Griffins “generated documents for the purpose of providing legal advice to ‘investors’ regarding possible claims to recover their losses”, including against BankSA; and

(b)    thereafter, until litigation funding was secured in about June 2013, there were only sparse communications with the investors and those communications were only “sufficiently focused” to demonstrate a real prospect of litigation from about June 2013.

79    BankSA denied that the objective surrounding circumstances on which the appellants relied show that there was a real prospect of litigation from 1 October 2009. It submitted that:

(a)    it is far from self-evident that a mainstream lender such as BankSA would have knowledge of any Ponzi scheme operated by Mr Samra sufficient to sustain a claim against it, for example, the state of mind that would permit an action to be brought under the first limb of Barnes v Addy. It argued that the fact that investors might consider such a claim does not mean that there was a real prospect of litigation at that point. It said that it might be inferred that investors would want to investigate whether a party with capacity to pay, such as BankSA, might be exposed to liability, but consideration of such a claim does not mean there was a real prospect of litigation at that point in time;

(b)    viewed objectively, the communications between Griffins and investors in late 2009 were just part of an investigative process and not for the dominant purpose of prospective or reasonably anticipated legal proceedings. Those investigations were logically anterior to, and a precursor to the point at which it could be said that proceedings are reasonably anticipated;

(c)    the absence of draft pleadings or advice from senior counsel until 2014 tended to show that what occurred between 2009 and mid-2013 was just investigation;

(d)    the contention that litigation was a real prospect in October 2009 is irreconcilable with the absence of substantial communications between Griffins and investors between 2010 and 2012, the unexplained delay of about four years in obtaining funding and having investors enter into funding and retainer agreements, about four to five years before instructions were given to draw pleadings, about five years before advice was sought or obtained from senior counsel and about five and a half years before proceedings were initiated; and

(e)    there was in fact no lawyer/client relationship between the appellants and Griffins until mid-2013.

80    BankSA also contended that the appellants failed to adduce focused and specific evidence that the dominant purpose of the communications between 1 October 2009 and 30 June 2013 was for the anticipated litigation, so as to discharge their onus in that regard: see Grant v Downs at 689 per Stephen, Mason and Murphy JJ; Barnes at [18]. It submitted that such a purpose is far from self-evident when there was no lawyer/client relationship between Griffins and the appellants and other investors until mid-2013 and where the primary judge found that Griffins was engaged in a process of investigation at its own instigation.

Consideration re litigation privilege

Appeal Ground 5 – the failure to examine the disputed documents

81    We deal first with appeal ground five which alleges that the primary judge erred in the exercise of discretion by failing to examine any of the disputed documents, particularly the Example Documents.

82    BankSA’s submissions gave little attention to this ground of appeal. It argued that the primary judge did not err in failing to inspect the disputed documents when, having regard to the nature of the evidence they adduced, the appellants had failed to make good their own privilege claims. It is not entirely clear, however, whether BankSA’s submission that the appellants failed to establish a House v King error was directed to the primary judge’s decision not to examine any of the disputed documents or was restricted just to his decision not to inspect the Example Documents. We proceed on the assumption that BankSA contended that the primary judge did not err in declining to examine any of the disputed documents, including the Example Documents.

83    As we explain, we consider the primary judge erred in deciding not to examine the disputed documents.

84    The primary judge’s conclusion that there was no real prospect of litigation until 30 June 2013 is based in his findings (at [87] and [89]) that, until that date, communications between investors and Griffins were not “sufficiently focused” and that litigation was no more than “a vague prospect” which depended on the availability of litigation funding for a “proper investigation and the procuring of advice about the prospects of success of such a claim”. The primary judge said that before 30 June 2013 there was no evidence to demonstrate:

(a)    a coherent and cogent assembly of relevant documentary material;

(b)    the taking of witness statements;

(c)    the drawing of any briefs to counsel to advise as to prospects of success in a claim such as the present case;

(d)    the provisional engagement of any appropriate expert witnesses; or

(e)    any material plan for the collation or assessment of information and witness statements.

His Honour inferred that the coherent assembly of materials, the preparation of draft pleadings and the advice of counsel upon which LCM was then to determine whether it would fund the proposed claim, did not commence until June 2013.

The Privilege Schedule

85    The primary judge’s consideration of the privilege claims should have started with consideration of the document descriptions in the Privilege Schedule. BankSA did not contend that the document descriptions were insufficient to allow a meaningful testing of the privilege claims, and the accuracy of the description of documents in such a list, compiled by a solicitor on oath, is usually to be relied upon by the Court. As Jenkins LJ said in Westminster Airways Limited v Kuwait Oil Co Limited [1951] 1 KB 134 (Westminster Airways v Kuwait Oil) at 146:

…if, looking at the affidavit, the court finds that the claim to privilege is formally correct, and that the documents in respect of which it is made are sufficiently identified and are such that, prima facie, the claim to privilege would appear to be properly made in respect of them, then, in my judgment, the court should, generally speaking, accept the affidavit as sufficiently justifying the claim without going further and inspecting the documents.

86    We have some sympathy for the primary judge’s position in regard to the Privilege Schedule, faced as his Honour was with the onerous task of picking through a 70 page Excel spreadsheet listing more than 2,000 documents so as to identify by reference to the document descriptions which of them appeared prima facie to be privileged. In the appeal and cross-appeal our task is made somewhat easier by the appellants’ preparation of four reorganised schedules and by our direction to the parties to prepare two further schedules which list and identify all documents relevant in the appeal and the cross-appeal.

87    We were also assisted in the appeal and cross-appeal by our direction to the parties to prepare folders of the disputed documents corresponding to the two further schedules. Our examination of the disputed documents did not require us to rummage through nine boxes to look for relevant documents, as the primary judge would have been required to do had he decided to examine the documents. At first instance, the appellants should have done more to make the Court’s task easier.

88    The Privilege Schedule describes numerous documents which strongly point away from the findings that the primary judge made. This can readily be seen in the four reorganised schedules being:

(a)    the Example Documents Schedule, which lists documents which came into existence and record, or are, communications between investors and Griffins in October and November 2009;

(b)    the Client Documents Schedule which lists documents which came into existence and record, or are, communications between investors and Griffins on an investor by investor basis throughout the period from October 2009 to 30 June 2013;

(c)    the Counsel Documents Schedule which lists documents which came into existence and record, or are, communications between Griffins and counsel in regard to investors’ claims against BankSA throughout the period from October 2009 to 30 June 2013;

(d)    the Client Lists Schedule which identifies lists of the investors who consulted Griffins and information about their losses, created by Griffins throughout the period from October 2009 to 30 June 2013.

Communications between investors and Griffins

89    The Client Documents Schedule (extracted from the Privilege Schedule) identifies numerous documents which record communications between investors and Griffins in the period from 1 October 2009 to 30 June 2013. The schedule is 100 pages in length and lists (on average) approximately 18 documents per page. It lists documents which record, or are, communications between 74 groups of investors (counting family groups as one investor) and Griffins on an investor by investor basis. The document descriptions are usually “Griffins’ file notes” or “memos” described as “Seeking or receiving instructions from client”, “Seeking advice regarding a claim”, “Providing advice regarding a claim” and “Providing a report on the claim”, and sometimes also record that the investor provided documents to Griffins.

90    The extent of the communications varied from investor to investor and in relation to many investors it continued through the relevant period. For example, the Privilege Schedule shows communications between Griffins and:

(a)    Mr Ferluga (on behalf of himself, Susan Ferluga and Renato Ferluga) on 6, 8 and 12 October 2009, 28 April 2010, 10 November 2011, 14 November 2011, 23 November 2011, 25 November 2011, 14 December 2011, 29 February 2012, 25 May 2012, 2 August 2012, 10, 16 and 18 October 2012, 17 January 2013 and 11 April 2013 and that he provided documents on 19 February 2010; and

(b)    Galliano and Antoinetta Perazzoli on 20, 21 and 23 October 2009, 1 December 2009, 5, 7, 8 and 15 January 2010, 16 March 2010, 22 April 2010, 17, 18 and 19 May 2010, 7 June 2010, 15 August 2010, 15 October 2010, 24 November 2010, 14 February 2011, 8 March 2011, 11 May 2011, 16 and 26 September 2011, 10 and 25 November 2011, 7 and 14 December 2011, 6 and 8 February 2012, that they provided documents on 14 February 2012, 21 and 28 February 2012, 26 March 2012, 12 April 2012, 1 June 2012, 13 August 2012, 7 September 2012, 5, 10 and 16 October 2012, 4 and 18 February 2013, and 21 May 2013 and that they provided documents on 27 January 2010.

There were substantially fewer communications with some other investors.

91    The Example Documents Schedule lists a subset of those communications, commencing with the meeting between Griffins and investors on 1 October 2009 and covering the months of October and November 2009 (with one outlier document dated 6 January 2010). Those communications, at the commencement of the dealings between investors and Griffins, are material to understanding their relationship and to give context to their later dealings. It identifies the following documents:

(a)    a file note of Griffins dated 1 October 2009, described as “Griffins file note – conference with Greg Griffin, Adam Coombe, Lucy Travers, Henry Winter, Patrick Coope and 13 potential participants in the class action” and as “Providing advice regarding a Claim” and “Privileged information provided to a proposed funder to enable it to decide whether to fund a Claim” (emphasis added);

(b)    five email chains between investors and Griffins, variously described as “re: Class action – ALC Group Pty Ltd” “re: Samra and Bank of South Australia – Class Action”, “re: Class Action Meeting” and “re: Class action – documents received [from an investor]” and as “Seeking or receiving instructions from Client” and “Seeking advice regarding a Claim” (emphasis added); and

(c)    46 Griffins’ file notes or memos of attendances or conferences between investors and Griffins in which the communications are described as “Seeking or receiving instructions from Client”, “Providing advice regarding a Claim” and “Seeking advice regarding a Claim”.

92    In our view the document descriptions in the Client Documents Schedule and the extent of the communications between the investors and Griffins point away from the primary judge's conclusion that before 30 June 2013 there was no evidence of a coherent assembly of relevant documentary material, the taking of witness statements, or of a material plan for the collation and assessment of relevant information and witness statements.

Communications between Griffins and counsel

93    The Counsel Documents Schedule (extracted from the Privilege Schedule) lists numerous documents which came into existence and record, or are, communications between 1 October 2009 and 30 June 2013 between Griffins and counsel in regard to a potential class action against BankSA. It lists 99 documents with document descriptions including:

(a)    “Greg Griffin letter to Counsel re: Possible Class Action seeking advice” and as “Communications between Counsel and Griffins relating to Counsel advice” and “Privileged information provided to a proposed funder to enable it to decide whether to fund a Claim” dated 4 November 2009 (emphasis added);

(b)    “Griffins file note re class action and of meeting with Patrick Coope, [and] counsel” and as “Counsel advice” and “Privileged information provided to a proposed funder to enable it to decide whether to fund a Claim” dated 13 November 2009;

(c)    “Griffins File Note re conference with Counsel, Patrick Coope, Greg Griffin, Adam Coombe and Lucy Travers” and as “Counsel advice”, “Communications between Counsel and Griffins relating to Counsel advice” and “Privileged information provided to a proposed funder to enable it to decide whether to fund a Claim” dated 13 November 2009;

(d)    “Draft letters to various investors regarding potential litigation regarding Michael Samra (with handwritten amendments) and draft letter to Counsel seeking advice, internal Griffins emails” and as “Providing advice regarding a Claim” and “Providing a report on a claim” dated 22 November 2011;

(e)    “Draft letters to counsel (with handwritten amendments) seeking advice” and as “Communications between Counsel and Griffins relating to Counsel advice” dated 23 November 2011;

(f)    “Email chain between Adam Coombe, Bernie Walrut and Greg Griffin re: meeting with Counsel” and as "Work product” dated 12 December 2011;

(g)    “Draft internal Griffins memorandum regarding conference with Counsel” describing the basis of the privilege claim as being that the memorandum was prepared for the dominant purpose of the Trustee obtaining legal advice and/or professional legal services relating to anticipated legal proceedings dated 16 December 2011;

(h)    “Tax invoice to Griffins from Counsel” and as “Communications between Counsel and Griffins relating to Counsel advice” and “Providing advice regarding a Claim” dated 31 January 2012;

(i)    “Griffins File Note – Bernie Walrut conference with Counsel” and as “Counsel advice” and “Communications between Counsel and Griffins relating to Counsel advice” dated 7 May 2012;

(j)    “Email from Adam Coombe to Greg Griffin re draft opinion” and as “Communications between Counsel and Griffins relating to Counsel advice” dated 20 September 2012;

(k)    “Letter from Adam Coombe to Counsel” and as “Counsel advice” and “Communications between Counsel and Griffins relating to Counsel advice” dated 21 September 2012;

(l)    “Letter from Adam Coombe to Counsel” and as “Communications between Counsel and Griffins relating to Counsel advice” dated 28 September 2012;

(m)    “Email from Adam Coombe to Counsel re Samra: possible claims against Bank SA, attaching letter from Adam Coombe to Counsel seeking advice” and as “Communications between Counsel and Griffins relating to Counsel advice" dated 28 September 2012 (emphasis added);

(n)    “Griffins File Note – Adam Coombe conference with Greg Griffin re draft opinion of Counsel” and as “Seeking advice regarding a Claim” dated 4 October 2012;

(o)    “Griffins File Note – Adam Coombe conference with Greg Griffin and Counsel” and as “Seeking advice regarding a Claim” and “Providing a report on a Claim” dated 11 October 2012;

(p)    “Draft Memorandum to Counsel from Adam Coombe pursuing a class action against Bank SA (including drafts and handwritten notes) ” and as “Communications between Counsel and Griffins relating to Counsel advice” dated 11 December 2012 (emphasis added);

(q)    “Griffins Memorandum from Adam Coombe to re Pursuing a class action claim against BankSA” and as "Communications between Counsel and Griffins relating to Counsel advice” and “Privileged information provided to a proposed funder to enable it to decide whether to fund a Claim” dated 11 December 2012;

(r)    “Griffins File Note – Adam Coombe notes of conference with Counsel” and as “Counsel advice” dated 20 December 2012;

(s)    “Griffins internal Memorandum to Greg Griffin from Adam Coombe re conference with Counsel and drafts thereof” and as “Counsel advice” dated 8 January 2013;

(t)    “Griffins File Note - Adam Coombe telephone call from Moreno Ferluga” and as “Providing a report on a Claim” and “Counsel advice” dated 17 January 2013;

(u)    “Griffins Memorandum from Adam Coombe to file re representative proceedings (including drafts and handwritten amendments)” and as “Counsel advice” dated 18 January 2013 (emphasis added);

(v)    “Email correspondence between Adam Coombe, Greg Griffin and Patrick Coope attaching memorandum from Adam Coombe to Greg Griffin re attendance on Counsel” and as “Counsel advice” and “Privileged information provided to a proposed funder to enable it to decide whether to fund a Claim” dated 24 January 2013;

(w)    “Email from Adam Coombe to counsel chambers and Greg Griffin re Michael Samra/potential claim(s) against BankSA attaching Griffins letter to Counsel seeking advice with attachment” and as "Communications between Counsel and Griffins relating to Counsel advice” dated 27 February 2013 (emphasis added);

(x)    “Letter from Greg Griffin to Counsel re potential class action claim against Bank SA seeking advice” and as “Communications between Counsel and Griffins relating to Counsel advice” dated 27 February 2013;

(y)    “Griffins file note – Adam Coombe notes of conference with Counsel and Monika Peretko”, and as “Communications between Counsel and Griffins relating to Counsel advice” and “Counsel advice” dated 19 March 2013;

(z)    “Griffins Memorandum from Adam Coombe to Counsel re Moreno Ferluga and BankSA and as “Communication between Counsel and Griffins relating to Counsel advice” and “Privileged information provided to a proposed funder to enable it to decide whether to fund a Claim” dated 21 March 2013 (emphasis added);

(aa)    “Memorandum from Griffins to Counsel” dated 25 March 2013;

(bb)    “Memorandum of Advice of Counsel” and “Memorandum from counsel to Griffins” and as “Counsel advice” dated 28 March 2013; and

(cc)    “Email from Greg Griffin to Patrick Coope and Kara Hancock re documents provided to Counsel (including chain emails between [various Griffins solicitors and Patrick Coope]” and as “Disclosure of privileged information to a litigation funder concerning a Claim” dated 24 June 2013.

94    Those document descriptions show that following the meeting between investors and Griffins on 1 October 2009, and following numerous attendances by Griffins on investors described as “Seeking or obtaining instructions from Client” or “Seeking advice” in the period immediately following that meeting, on 4 November 2009 Griffins briefed counsel to advise and had a conference with counsel on 13 November 2009. Although this may be incomplete, Griffins at least also briefed and/or conferred with counsel in November 2011, May, September/October and December 2012, January, February and March 2013.

95    In our view, this material is incompatible with the primary judge’s findings that:

(a)    there was no evidence that before 30 June 2013 Griffins had prepared briefs to counsel to advise as to prospects of success of a case against BankSA;

(b)    before 30 June 2013, Griffins did not have a “material plan” for the collation and assessment of relevant information and material it gathered in relation to investor claims. That could not be the case when the firm prepared a number of briefs to counsel over the period; and

(c)    counsel’s advice about the prospects of success could not be obtained until litigation funding was secured in about June 2013, which permitted a proper investigation and the obtaining of counsel’s advice.

Lists of the investors who consulted Griffins and information about their losses

96    The Client Lists Schedule (extracted from the Privilege Schedule) contains 16 lists of investors made by Griffins in the period from approximately October 2009 to October 2012. It includes documents described as:

(a)    “Class Action: List of People including contact details and brief observations” dated approximately October 2009 (emphasis added);

(b)    “Table of investor information” dated 16 October 2009;

(c)    “Table of investors and investments information” dated October 2009, November 2009 and September 2010;

(d)    “List of lenders prepared by Griffins” dated September 2012; and

(e)    “Table headed ALC Creditor Contact List” dated October 2012.

97    The document descriptions tend to show that, following the meeting between investors and Griffins on 1 October 2009, and following the numerous attendances by investors on Griffins described as “Seeking or obtaining instructions from Client” or “Seeking advice” in the months thereafter, Griffins assembled lists of those investors who were interested in pursuing litigation, together with information about the losses they had suffered. In our view, that is incompatible with the primary judge’s finding that there is no evidence of a material plan for the assembly of relevant documentary materials.

98    Overall the Privilege Schedule tends to show that, contrary to the primary judge’s findings, between October 2009 and 30 June 2013, Griffins had a plan for the coherent assembly of relevant documentary materials, gathered material and took statements from investors in relation to their claims against BankSA and sought and obtained counsel’s advice in relation to those claims.

Mr Griffin’s uncertain evidence

99    One factor underpinning the primary judge’s finding that there was no real prospect of litigation before 30 June 2013 was Mr Griffin’s evidence in his first affidavit. He said that, during the period of the Samra Bankruptcy Proceedings (between August 2011 and July 2013), Griffins “had not been retained” by the appellants or other investors in respect of the class action.

100    The primary judge described Mr Griffin’s evidence in that regard as an “unequivocal assertion” (at [66] and [73]). In our view, Mr Griffin’s evidence as to whether he acted for the investors was not unequivocal. As we have said, he tried to dance on the head of a pin in regard to whether Griffins acted for the investors, probably because of a sensitivity about his position in that regard. The uncertainty in Mr Griffin’s evidence was another reason to examine the disputed documents, because his evidence as to Griffins’ relationship with the investors is significant to whether privilege attaches to the relevant communications.

The House v King error

101    A party should not assume that a court will take the time and trouble to examine a multitude of documents in a privilege dispute if the party cannot muster sufficient interest in the protection of its right to privilege by putting on appropriate evidence in support of the claim: Bailey v Department of Land and Water Conservation [2009] NSWCA 100 at [2] (Allsop P). But in the present case, while the appellants could have done more to assist the Court, they put on appropriate evidence. The Privilege Schedule includes a brief description of the nature of each document, its date, provenance and the basis of the privilege claim sufficient to permit a meaningful testing of the claims to privilege.

102    The primary judge did not explain his decision not to inspect the documents. In House v King the plurality explained (at 505) that where the basis of a decision is not disclosed:

…if upon the facts [the decision] is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.

In such circumstances it is unnecessary to establish a “definite or specific error” to make out an error in the exercise of discretion: Cranssen v R (1936) 55 CLR 509 at 520 (Dixon, Evatt and McTiernan JJ).

103    The primary judge approached the exercise of the discretion to inspect the documents with the hope and “ambition” of not doing so. His Honour decided not to inspect any of the disputed documents, notwithstanding that:

(a)    the Privilege Schedule identified numerous documents dated before 30 June 2013 which appeared from the document descriptions prima facie to be privileged;

(b)    Mr Griffin's evidence as to whether Griffins acted for the investors before 30 June 2013 was uncertain; and

(c)    his Honour was specifically invited to inspect the Example Documents, which would have assisted him to characterise the relationship between the investors and Griffins from the outset.

104    In our respectful view, the primary judge did not pay sufficient regard to the Privilege Schedule, treated Mr Griffin’s evidence as unequivocal when it was far from that, made findings incompatible with the document descriptions in the Privilege Schedule, and thereby mistook the facts. His Honour’s approach was contrary to that recommended in Esso (at [52]), where the plurality said that a court should not be hesitant in examining documents in respect of which disputed claims of privilege are made. In the circumstances, and having regard to the seriousness of the adverse consequences for the appellants and class members of a loss of privilege over important documents in major litigation, the primary judge should not have reached the findings that he did without examining the documents. The appellant suffered a “substantial wrong” because, had the primary judge examined the documents, the only available conclusion would have been that there was a real prospect of litigation from October 2009 and that litigation privilege attached to the relevant documents.

105    We uphold ground five of the appeal.

Appeal Grounds 2, 3 and 4 - misapplication of the test for litigation privilege

106    Grounds of appeal two, three and four allege that the primary judge erred:

(a)    by failing to correctly apply the test to decide whether documents brought into existence in the period 1 October 2009 to 30 June 2013 were the subject of litigation privilege (Ground 2);

(b)    in concluding that the evidence and materials before him did not demonstrate a real prospect of litigation, as distinct from a mere possibility, from 1 October 2009 (Ground 3); and

(c)    in finding (at [87]) that there was no evidence or materials before him to demonstrate a coherent and cogent assembly of relevant documentary material, the taking and recording of statements of potential witnesses and the drawing of briefs to counsel for the getting of advice about the prospects of a claim such as the present from October 2009 (Ground 4).

The grounds are interrelated and it is convenient to deal with them together.

107    The primary judge’s task was to decide, having regard to the surrounding facts and circumstances, whether the communications over which privilege was claimed were made for the dominant purpose of “reasonably anticipated” litigation. Whether litigation is reasonably anticipated is to be determined by the Court objectively viewing all the circumstances existing at the time: Grant v Downs at 682-683; Mitsubishi at [20]. His Honour was required to decide whether there was a real prospect of litigation, as distinct from a mere possibility, although the litigation need not be more likely than not.

108    The primary judge’s conclusion that there was no real prospect of litigation before 30 June 2013 is based in his Honour’s findings (at [87] and [89]) that until that time:

(a)    there was no evidence to demonstrate a coherent and cogent assembly of relevant documentary material, the taking of statements from potential witnesses, the preparation of briefs to counsel to advise as to prospects of success or any material plan for the collation of assessment of information; and

(b)    communications between investors and Griffins were not “sufficiently focused” and that litigation was no more than “a vague prospect” which depended on the availability of litigation funding for a “proper investigation” to permit counsel’s advice to be obtained about the prospects of success of such a claim.

109    Such considerations were clearly pertinent to deciding whether there was a real prospect of litigation but in our view the primary judge erred in reaching those conclusions and also in treating those considerations as decisive. We respectfully consider that the primary judge failed to give proper consideration to the objective surrounding circumstances including the unchallenged evidence of Mr Griffin and Mr Ferluga and to the document descriptions in the Privilege Schedule. His Honour also gave too much weight to the delay in securing litigation funding and insufficient weight to the fact that investors were paying some of the disbursements incurred in the investigation of the case. His Honour also erred by failing to examine the disputed documents. Our examination of the documents confirms that there is no proper basis for the primary judge’s findings at [87] and [89].

110    We will address appeal grounds two, three and four under the following headings:

(a)    the objective surrounding circumstances:

(i)    the accident/fire line of authority;

(ii)    the unchallenged evidence of Mr Griffin and Mr Ferluga;

(iii)    BankSA’s contentions as to the objective surrounding circumstances;

(iv)    BankSA’s contention as to the delay in commencement of litigation;

(b)    the document descriptions in the Privilege Schedule;

(c)    the delay in securing litigation funding;

(d)    the fact that investors paid some of the costs of the case investigation; and

(e)    our inspection of the disputed documents.

The objective surrounding circumstances

111    BankSA contended that the appellant’s contentions wrongly invite a wholesale reconsideration of the evidence as to the objective surrounding circumstances including the evidence of Mr Griffin and Mr Ferluga and of the primary judge’s findings on the evidence. We accept that the appeal involves a reconsideration of the evidence and the primary judge’s findings. However, the evidence below was by affidavit and BankSA did not cross-examine Mr Griffin or Mr Ferluga. The primary judge proceeded on the basis of the reliability of the primary facts asserted. We are in at least as good a position as the primary judge to decide on the proper inferences to be drawn from the undisputed facts and to reach a view as to the objective surrounding circumstances: Warren v Coombes (1979) 142 CLR 531 at 551 (Gibbs ACJ, Jacobs and Murphy JJ). Indeed, because we have examined the disputed documents we are in a better position than the primary judge.

The accident/fire line of authority

112    The appellants relied on a line of cases which they described as “accident/fire” cases. We have adopted the same expression, although the principle is not so restricted.

113    The appellants pointed to the fact that when investors consulted Griffins in October 2009 they had lost tens of millions of dollars in what they said was a fraudulent Ponzi scheme which had collapsed. They contended, and we accept, that an event of this type is one that can self-evidently give rise to a prospect of litigation of some kind or kinds, such that litigation privilege may be attached to relevant communications. In our view the primary judge should have, but failed to, take these surrounding circumstances into account.

114    In Cataldi v Commissioner for Government Transport [1970] 1 NSWR 65 (Cataldi) at [67]-[68] (Sugerman P, Mason and Moffitt JJA), the NSW Court of Appeal allowed a claim of litigation privilege over an accident report prepared by an employee of a bus operator following an accident in which one of the respondent’s buses struck a pedestrian. Although no litigation was threatened, the Court said that the circumstances were such as to compel the inference that the report was brought into existence for litigation and it attracted litigation privilege. In Nickmar v Preservatrice Skandia Insurance (1985) 3 NSWLR 44 (Nickmar) at 55-6 Wood J said that he had “no difficulty in objectively inferring that litigation could reasonably be anticipated in the case of a suspicious claim, arising out of a fire said to have caused considerable damage to commercial premises and stock.”

115    Mitsubishi, a decision of the Victorian Court of Appeal, is a leading authority in this regard. The facts were that Mr Vellios, who was employed by Vellios Electrical Contractors Pty Ltd, which was in turn contracted by Snedden and Kingston Plastics Pty Ltd to build and install a new switchboard at Kingston Plastics’ premises, suffered injury in an explosion which he said was caused by a faulty circuit breaker in a switchboard manufactured, assembled and/or supplied by Mitsubishi. Before any litigation was threatened or commenced, the solicitors for Mitsubishi commissioned an investigator to report into the circumstances of the incident. Ultimately, Mr Vellios commenced a damages action against Mitsubishi and other parties for negligence and breach of statutory warranty. Mitsubishi claimed litigation privilege in relation to the investigation reports earlier created.

116    Batt JA (with whom Charles and Callaway JJA agreed) said (at [22]) that, at the time the reports were commissioned, there was a real prospect of litigation such that litigation privilege was attracted to the report. His Honour said that Mr Vellios was likely to make a workers compensation claim which “might well have” resulted in litigation including a proceeding against Mitsubishi by the Victorian WorkCover Authority for an indemnity for the workers compensation payments made, that Vellios Contracting “might well have” brought litigation for business interruption, and that Snedden and Kingston Plastics “might well have” sued for damage to the switchboard and premises. His Honour said that:

…the nature of the incident with the circuit breaker was inherently such as to make litigation of some kind or kinds likely according to the ordinary course of human affairs.

…

…the occurrence of an event of a kind that, in common experience, very often leads to litigation may found a sufficient anticipation of litigation to attract privilege.

(Emphasis added)

117    BankSA argued that this line of authority should be distinguished because in late 2009 it would have been far from self-evident to the investors in the Adelaide Lending Centre that a claim existed against BankSA, and that any appreciation of such a claim could not have developed until investigations were conducted.

118    That misunderstands this line of authority, which provides that the existence of a real prospect of litigation does not depend upon a subjective appreciation as to whether there is an arguable cause of action. For example, in Cataldi, Nickmar and Mitsubishi it could not be said to have been certain at the outset that there was some cause of action against the party thought to have caused those accidents, at least until proper investigations had taken place. Nor could it be said to be certain that the victim of those accidents would have the financial wherewithal to bring litigation, and if they did not, that litigation funding would be available to them. The claims of litigation privilege were upheld because there was a real prospect of litigation “of some kind or kinds” by reason only of the happening of an event of a kind that, in common experience, very often leads to litigation.

119    In our view, the collapse of an investment scheme involving allegations of fraud and causing multi-million-dollar losses to investors very often leads to litigation of some kind or kinds. To use the words of Batt JA, an occurrence of that kind “might well have” resulted in litigation by the investors against those that they deemed liable for their losses.

The unchallenged evidence of Mr Griffin and Mr Ferluga

120    The appellants also relied upon the unchallenged evidence of Mr Griffin and Mr Ferluga. Mr Griffin’s evidence was to the effect that, immediately after the collapse of the allegedly fraudulent scheme, a number of investors who knew that he was a solicitor approached him and asked him to assist them in recovering the monies they had lost. A short time later, on 1 October 2009, Mr Griffin, in his professional capacity, convened a meeting with investors at the offices of Griffins, to discuss potential legal avenues for recovery of their losses. Thereafter, Mr Griffin and other lawyers in the employ of Griffins provided advice to the investors as to their possible legal claims, doing so individually and in groups. Griffins took copies of the confidential documents provided by investors, created its own documents and asked investors to make copies of documents to provide to Griffins. Mr Griffin’s unchallenged evidence is that “[t]he purpose of creating those documents and making those copies was the possible legal proceedings to be brought by investors to recover lost moneys and for the provision of legal advice in respect of such claims.” Further, as the Privilege Schedule shows, Griffins had numerous attendances on investors described as “Seeking or receiving instructions from Client”, “Seeking advice regarding a Claim”, “Providing advice regarding a claim” and “Providing a report on the claim”.

121    Mr Ferluga corroborated Mr Griffin’s evidence. He was an investor in the allegedly fraudulent scheme and he said that he attended the meeting at the Griffins’ office on 1 October 2009 because he was “interested in becoming involved in an action against the Samra Entities and/or BankSA”. Shortly thereafter, he had a telephone call with Griffins, and arranged a meeting the following day, for the purpose of receiving advice from Griffins about the possibility of the Ferluga entities “participating in any action pursued on behalf of investors who had lost money dealing with the Samra Entities”.

122    He said that, in all his subsequent communications with Griffins, the Ferluga entities were seeking advice from Griffins about their potential claims against BankSA and the Samra entities and “participation in any action” that was commenced. As the Privilege Schedule shows, he had communications with Griffins on numerous dates in October 2009, February and April 2010, November and December 2011, February, May, August and October 2012 and January and April 2013, many of which are described as “seeking or receiving instructions from Client” or “seeking advice regarding a Claim”.

123    The evidence of Mr Griffin and Mr Ferluga strongly points to a prospect of litigation of some kind or kinds from the outset of the dealings between investors and Griffins. BankSA did not suggest any reasonable alternative explanation as to why the victims of an alleged Ponzi scheme which had just collapsed and caused them major losses would immediately consult (and continue to consult) solicitors other than to obtain advice about their legal rights through prospective litigation.

BankSA’s contentions as to the objective surrounding circumstances

124    BankSA adopted the primary judge’s intermediate findings of fact as to the objective surrounding circumstances. In our view, some of those findings are against the evidence and BankSA’s contentions as to the appropriate inferences are overstated. For example, BankSA submitted that there was no real prospect of litigation until 30 June 2013 because:

(a)    senior counsel’s advice was not sought and obtained until 2014 (as BankSA said the primary judge found at [71]). Contrary to that contention, the evidence shows that senior counsel’s advice was first sought and obtained in November 2009 and further advice was sought from counsel in 2011, 2012 and 2013.

(b)    a proper investigation of the claim against BankSA did not take place until litigation funding was secured in about June 2013 (as the primary judge appeared to find). Contrary to that contention, the evidence shows Griffins commenced a proper investigation of investors’ claims against BankSA and the Samra entities in October 2009 and its investigations continued through 2011 to 2013, although there were periods of delay;

(c)    Griffins sought litigation funding at its own instigation and not on the instructions of any of the investors (as the primary judge found). Based upon our inspection of the documents, we are satisfied that the investigation of the availability of litigation funding was undertaken with the concurrence and pursuant to the expectations of the investors; and

(d)    there was no solicitor/client relationship between Griffins and investors until 30 June 2013 (as the primary judge found). As we later explain, we are satisfied on the evidence that Griffins and investors who consulted the firm from 1 October 2009 had the requisite relationship of trust and confidence and it is appropriate to infer a solicitor and ‘client’ relationship between them.

BankSA’s contention as to the delay in commencement of litigation

125    BankSA contended that the lengthy delay between the investors consulting Griffins in October 2009 and the commencement of the proceeding in 2014 indicated that there was no real prospect of litigation in 2009. We disagree.

126    The question is whether, at the point at which the relevant communications were made or the relevant documents came into existence, litigation was reasonably in anticipation. In our view, BanksA’s reliance on the delay in commencing the case involves a counsel of perfection. Large class actions like the present case involve significant legal work in the incipient stages and case preparation is often slow. The lengthy time that may be taken in such work does not necessarily mean that litigation was not reasonably anticipated from an early date.

127    The evidence, including our inspection of the disputed documents, shows that Griffins rapidly built a case to be brought by investors against BankSA in October, November and December 2009 and in the early part of 2010. Case preparation then slowed as Griffins waited for the results of the liquidators’ investigation of the collapse of ALC, awaited the bankruptcy examinations and endeavoured to finalise the availability of litigation funding. We are well satisfied that litigation was reasonably in anticipation in October, November and December 2009 and in our examination of the documents we did not see anything to show that the real prospect of litigation materially fell away thereafter.

128    It should also be noted that delay by lawyers is unfortunately common and it may be capable of explanation. More importantly, our inspection of the documents shows that the cause of the delay did not lie at the feet of the investors. We would not lightly conclude that a lawyer’s delay means that clients lose the benefit of the litigation privilege that would otherwise attach to their confidential communications.

The document descriptions in the Privilege Schedule

129    The document descriptions in the Privilege Schedule confirm our view as to the objective surrounding circumstances.

130    We described some of the relevant document descriptions when dealing with appeal ground five, and we will not reiterate that. It suffices to note that the Privilege Schedule shows that Griffin Lawyers met with investors (described in a Griffins file note as “13 potential participants in the class action”) on 1 October 2009 and that Mr Coope of LCM attended that meeting. There are 46 Griffins’ file notes or memos of attendances or conferences between investors and Griffins in October and November 2009 which are described as “Seeking or obtaining instructions from Client”, “Providing advice regarding a Claim” and “Seeking advice regarding a Claim”, and in which some investors provide copy documents to Griffins. In all the circumstances the likelihood is that the investors were seeking advice in relation to prospective litigation.

131    On 4 November 2009, Griffins briefed senior counsel to advise on the prospects of a class action against BankSA and conferred with counsel in that regard on 13 November 2009. There would be no need for Griffins to seek senior counsel’s advice as to the prospects of a proposed class action unless litigation was “reasonably apprehended”. There would be no need for Griffins to arrange the attendance of a litigation funder at the meeting with investors on 1 October 2009 or at the conference with senior counsel on 13 November 2009 if there was no real prospect of litigation.

132    Contrary to the primary judge’s findings, the documents listed in the Privilege Schedule indicate that from October 2009 until 30 June 2013 Griffins had a plan for the coherent assembly of relevant documentary materials, lawyers of the firm collated and assessed information relevant to the investors’ claims, took witness statements and briefed counsel to advise in relation to the proposed class action by investors against BankSA, and communicated with investors in relation to developments in the proposed case.

The delay in securing litigation funding

133    The primary judge gave too much weight to the fact that Griffins did not secure litigation funding until about June 2013. We accept that whether a large class action is actually commenced may depend upon the capacity of the applicant to fund the case, but securing litigation funding may be the last piece of the puzzle. For example, litigation may be reasonably anticipated and the applicant and the applicant’s lawyers may be prepared to conduct the proposed case on a no-win no fee basis. They may however prefer to conduct the case with litigation funding and so decide to wait for the funder to finalise its due diligence. Alternatively, they may prefer a particular funder which, for its own reasons, delays its decision and ultimately decides not to fund the case. In such circumstances, the applicant may then offer the case to another funder or decide whether the case can be funded by contributions from class members. Litigation may be reasonably anticipated without nailing down the funding arrangements for the proposed case. To meet the test for litigation privilege there must be a real prospect of litigation as distinct from a mere possibility, but it does not have to be more likely than not that litigation will ensue. In our view, generally speaking, an attempt to engage a funder or to change funders would tend to show that litigation was reasonably anticipated.

134    Our inspection of the disputed documents shows that litigation was reasonably apprehended from October 2009 and, while there was delay in obtaining litigation funding, the real prospect of litigation remained throughout the relevant period. Our inspection shows that litigation funding was not refused at any point and that throughout 2010, 2011 and 2012 Griffins operated on the basis that it was likely that litigation funding would be secured. It seems that when LCM delayed its decision on funding, Griffins approached IMF to fund the proposed class action and IMF was interested in doing so.

135    It is also worth noting that under the primary judge’s approach, communications by a person of means who is considering litigation may attract litigation privilege, whereas communications by another person of insufficient means would not. Legal professional privilege exists to serve the public interest in the administration of justice by encouraging full and frank disclosure by clients to their lawyers. People should be entitled to seek legal assistance in and for the purposes of the conduct of anticipated litigation without the apprehension of being prejudiced by subsequent disclosure of the communication: Baker v Campbell (1983) 153 CLR 52 at 114 (Deane J). We would be reluctant to conclude that the availability of this important protection might turn on whether or not a person has the means to bring proposed litigation, and if not, whether the person is able to secure litigation funding.

The fact that investors paid some of the costs of the case investigation

136    The primary judge gave insufficient weight to annexure “MWE-15” to Mr Elson’s affidavit which comprises a trust account statement, invoices and receipts (the trust account statement, invoices and receipts). It includes a tax invoice dated 9 October 2012 for the period 6 March 2012 to 22 August 2012 to an investor, Carlo D’Ortenzio, for disbursements (including transcript charges in the bankruptcy examinations) and a trust account statement titled “GMG 81655 D’Ortenzio, Carlo: Class Action” of 10 October 2012 recording amounts received by Griffins between December 2011 and March 2012 from investors such as David Niehus, Andrew Mielke, T Pezi, A & G Perazzoli and Bill Kattis for counsel’s fees and for other disbursements paid by the Trustee and by Griffins. The bundle shows that those investors paid in the order of $70,000-80,000 for disbursements incurred in investigating the claim against BankSA, including in the bankruptcy examinations.

137    Those documents contradict the primary judge’s findings that there was no evidence of a material plan to assemble relevant documentary materials for anticipated litigation. We would ask why investors would pay such amounts unless they were seeking to gather information in aid of prospective litigation. These documents show that some of the investors were meeting some of the costs of the investigation which strongly points away from the primary judge’s conclusion that until 30 June 2013 Griffins was acting on its own instigation in investigating a class action against BankSA.

Our inspection of the disputed documents

138    Our examination of the disputed documents confirms that there is no basis for the primary judge’s findings at [87] and [89]. The documents show that there was a real prospect of litigation from 1 October 2009 until 30 June 2013. They show that, from the outset, Griffins had a plan for the coherent assembly of relevant documentary materials, lawyers of the firm gathered relevant material by attending upon, conferring with, taking instructions from, and receiving documents from investors in relation to their claims against BankSA, and sought and obtained advice of counsel (including senior counsel) in relation to such claims. In our view, litigation was reasonably anticipated from the outset, and although Griffins may have taken too long to commence the case, there is nothing in the documents to show that the prospects of litigation then fell away such that litigation became a mere possibility.

139    Because the disputed documents are privileged we will say little about their contents, but it does not harm the appellants’ interests to note the following:

(a)    On 1 October 2009, 13 investors attended a meeting with Mr Griffin at his offices. They did so to seek Mr Griffin’s assistance in recovering the losses they had suffered through the collapse of an investment scheme conducted by the Samra entities and (as was considered) facilitated by BankSA. It was proposed that a class action be brought against BankSA. Mr Griffin invited Mr Coope of LCM to attend the meeting in aid of securing litigation funding for the proposed litigation. LCM was to assess whether it would fund the proposed litigation and that, if it would not do so, the investors would be required to decide whether to fund the proposed class action themselves.

(b)    Griffins then gathered statements and information from investors with some urgency. Over the ensuing months, many more investors consulted the firm and, as they did so, Griffins took their statements and copied their confidential documents. Griffins’ lawyers put together lists of investors together with calculations of their estimated losses based on loan agreements and other documents investors supplied, and that permitted approximate calculations of total losses. From the outset, Griffins put together a “brief” of relevant documents to which it added documents as more investors provided their materials. Griffins’ lawyers investigated and reported to Mr Griffin as to the available causes of action and the steps to be taken in commencing a class action.

(c)    On 4 November 2009, Griffins forwarded a brief to Mr Whitington QC to advise in relation to a proposed class action by investors against BankSA. The brief stated that Griffins acted for more than 40 investors who instructed the firm to investigate pursuing a class action against BankSA. The notes of the subsequent conference on 13 November 2009 show that senior counsel and Griffins considered and recommended the causes of action appropriate to be pursued in the proposed class action.

(d)    By the first quarter of 2010, Griffins had obtained detailed witness statements from a number of investors who had agreed to represent the group either as applicants in a class action or as test cases for the group, depending upon which course was chosen. In August 2010, the FMC made orders to remove the previous trustee of Mr Samra’s bankruptcy. Mr Cooper was appointed as Trustee and he was aware that Griffins was investigating claims by the investors against BankSA. The decision to remove the previous trustee was in part underpinned by a perceived need for extensive bankruptcy examinations to be conducted: see Rozkalis v Samra 2010 FMCA 579 at [42].

(e)    Thereafter, case preparation slowed but did not stop as Griffins continued to prepare the case, but with less vigour. There were various reasons for Griffins’ delay through 2011 and 2012 including waiting for the liquidators’ report on investigations into the collapse of ALC, waiting for the Trustee to commence and then finalise the bankruptcy examinations, and waiting for Mr Samra to be available for examination. When it became apparent in late 2011 that there were insufficient funds available in Mr Samra’s bankrupt estate for the Trustee to pay for the proposed examinations, with the Trustee’s concurrence, Griffins sought contributions from investors towards the cost of investigations undertaken and to be undertaken. Some investors made contributions and others declined to do so. Although this list may be incomplete, in this period Griffins, at least, briefed and/or conferred with counsel in November 2011 and in May, September/October and December 2012.

(f)    The bankruptcy examinations did not conclude until November 2012, and by early 2013 the case was ready and, while it is not completely clear from the documents, the delay in commencing the action thereafter appears largely to be attributable to delay by counsel.

(g)    Throughout the relevant period, Griffins communicated with the investors by telephone and email, answering their queries and providing updates on developments in the proposed class action. Griffins met with large groups of investors at its offices on 8 June 2010, 17 November 2011 and 22 October 2012 and advised them on the steps that had been taken and were proposed to be taken in relation to the class action.

140    We are satisfied that there was a real prospect of litigation by investors against BankSA from October 2009 and, notwithstanding the delay in commencing the case, there is nothing to show that the prospect of litigation materially fell away thereafter.

Whether the appellants established the “dominant purpose” of the communications

141    BankSA contended that the appellants failed to establish by focused and specific evidence that the dominant purpose of the relevant communications was for reasonably anticipated litigation. It submitted that it is not self-evident that the relevant documents were created for the dominant purpose of seeking or obtaining legal advice and that the appellants failed to discharge their onus of proof in that regard.

142    We do not agree. The purpose of communications may be shown by evidence as to the circumstances and context in which the communications occurred or the documents were brought into existence, by evidence as to the purpose of the person who made the communication or authored the document, or by reference to the nature of the document: Grant v Downs at 689; AWB v Cole (2006) 152 FCR 382; [2006] FCA 571 at [63] (Young J). Purpose can also be determined from the content of the document understood in its full context: Asahi Holdings (Australia) Pty Ltd v Pacific Equity Partners Pty Ltd (No 4) [2014] FCA 796 at [32] (Beach J).

143    The appellants satisfied the dominant purpose test in such ways. First, the objective circumstances in which the documents came into existence or the communications were made tend to show that they were made for the purpose of legal assistance in and for the purposes of the conduct of reasonably anticipated litigation. Second, the unchallenged evidence of Mr Griffin and Mr Ferluga supports that conclusion. Third, the document descriptions in the Privilege Schedule point to the same conclusion. There was no requirement for any further evidence. We are confirmed in our view by our inspection of the disputed documents.

144    We uphold grounds two, three and four of the appeal.

F.    ADVICE PRIVILEGE

The primary judge’s reasons

145    Under Item 1 of the Notice of Opposition, BankSA described this ground of opposition to the claims of privilege as follows:

In respect of the period prior to 1 July 2013, there was no solicitor/client relationship between any of the Applicants or Group Members [as defined in para 4 of the Statement of Claim] and [Griffins], nor any evidence of circumstances that would otherwise attract privilege outside of an established solicitor/client relationship. If this is accepted then each of the claims to legal professional privilege identified in Annexure 1 to the Notice will be decided adversely to the applicants, and those documents will be available for inspection by BankSA.

146    At [56]-[62], the primary judge summarised Mr Griffin’s evidence to the effect that:

(a)    he was approached by investors at the end of the creditors’ meeting in September 2009 who requested that he assist them to recover the monies they had lost through the Samra entities;

(b)    he convened a meeting of investors at the offices of Griffins on 1 October 2009 to discuss potential legal avenues for recovery of their losses. Mr Griffin assumed those investors who attended wished to discuss with him, as a lawyer, their legal options, to receive legal advice and to consider retaining Griffins for any future legal action. Griffins also acted for individual investors in relation to some discrete matters relating to Mr Samra and ALC;

(c)    he then had intermittent further meetings of a similar character with investors from time to time. In the course of those meetings, investors were asked to provide documents for Griffins’ consideration and from time to time Griffins created documents “for the purpose of providing legal advice to investors regarding possible claims to recover their losses” including a potential claim against BankSA;

(d)    from about late 2009, he had discussions with litigation funders LCM and IMF about funding a potential claim against BankSA to recover the investors’ losses. His Honour inferred that the discussions with litigation funders were at Mr Griffin’s instigation rather than on instructions from any of the investors;

(e)    all communications with each investor or investors and with LCM and IMF were confidential; and

(f)    by about mid-2013, LCM, Griffins and potential class members had progressed towards entering into a litigation funding agreement for the present proceeding. Instructions were given to counsel to draw pleadings and to obtain senior counsel’s advice as to the prospects of success. The appellants entered into a formal retainer agreement with Griffins in about June 2013 to investigate, and if appropriate, institute and conduct the present proceeding.

147    The primary judge said (at [63]-[64]) that Mr Ferluga’s evidence broadly confirmed the evidence of Mr Griffin, to the effect that:

(a)    he attended the meeting at Griffins on 1 October 2009, together with a number of other investors “in relation to a possible class action, to discuss the possible recovery of losses from dealings with Samra”;

(b)    he followed that up with a further meeting with Griffins on 7 October 2009 when he provided more detailed instructions about his and his family’s interests and the monies they advanced to ALC, and arranged to provide documents as requested. That level of communication continued over the next several years;

(c)    Griffins was, on behalf of the Ferluga entities, to provide legal advice to him “about possible action, to seek litigation funding from about October 2009, and then, subject to the funding being available, to conduct this proceeding on their behalf”.

148    The primary judge held (at [65]):

In my view, there was a limited solicitor-client relationship between at least Mr Ferluga and his family’s interests and [Griffins] from about 1 October 2009, when he says he first met with other investors and [Griffins] through Mr Griffin. His purpose for attending the meeting about that time was to get at least some advice about the prospects of recovery of the sums they had invested in ALC, including possibly from BankSA. It may well have been prompted by an invitation from Mr Griffin to give consideration to such prospects, either made at the ALC liquidator’s meeting or just afterwards. But Mr Ferluga’s affidavit is clear about why he spoke to Mr Griffin from time to time from about that date, and up to February 2015.

(Emphasis added)

149    At [66] the primary judge said:

That finding fits broadly with Mr Griffin’s unequivocal assertion that at least until 31 July 2013 (the date he says the “Samra Bankruptcy Proceedings” came to an end and in fact the date [Griffins] ceased to act for the Trustee), [Griffins] had not been retained by the applicants or by any Group Member to institute and conduct the present proceeding, including against BankSA. He says his role from the latter part of 2009 was to act in limited respects for individual investors in relation to their dealings with Mr Samra and the “wider Samra matter”. There may be some slight overlap period because by about June 2013, the funding agreement between LCM and [Griffins] (and others) for the potential conduct of this proceeding had been entered into. I will adopt the date 30 June 2013 for the date of commencement of the general retainer by the applicants to institute and conduct the current claims against BankSA.

(Emphasis added)

150    At [67], the primary judge noted BankSA’s submission that, until about 30 June 2013, Griffins was, itself, exploring the prospects of a class action against BankSA by assembling data, exploring funding options and inviting investors in ALC to meetings to assess and maintain an interest in such an action. His Honour said that “[t]hat proposition underlies its strike out application. It is no surprise to the applicants.” His Honour said it was therefore necessary to assess the evidence about the nature and extent of the relationship between investors and Griffins over the period up to 30 June 2013. The primary judge took into account that it was open to the appellants to adduce further evidence and they did not.

151    The primary judge said [at [68]) that:

I do not find that Mr Griffin’s communications until about the end of June 2013 or perhaps a little later with LCM or ICF about the possibility of funding a claim… were made pursuant to any retainer or indeed directly for a client with whom [Griffins] then had a client-solicitor relationship. The evidence is imprecise. It is consistent with Mr Griffin’s exploring the prospect of a funding arrangement for an action such as the present proceeding of his own initiative, as a means then of putting a proposal to the applicants and other group members so that they might instruct [Griffins] to act for them and to pursue such a claim.

(Emphasis added)

At [69], his Honour noted Mr Griffin’s evidence that he had “sporadic and general discussions” with LCM from late 2009, but did not secure litigation funding until about mid-2013.

152    In relation to Mr Ferluga’s evidence, the primary judge said (at [70]):

Mr Ferluga’s affidavit, to the extent it might support some different finding, is too vague in my view to do so. He refers to the meeting on 1 October 2009 and, as a result of a telephone call on 6 October 2009 from Mr Coombe of [Griffins], a meeting with Mr Coombe on 7 October 2009. Then he refers to numerous further discussions and communications with [Griffins] until February 2015, at which he gave instructions and provided documents and sought advice about the prospects of a claim or claims. He says he also sought [Griffins’] advice about “the progress of the action” throughout that period. That cannot be precisely correct. The action was not instituted until 14 November 2014, and instructions to bring such a claim could not have been given at least until after 31 July 2013 on Mr Griffin’s affidavit.

153    His Honour noted (at [71]) Mr Griffin’s evidence that it was only in 2014 that LCM required the preparation of draft pleadings and advice from senior counsel, after which his Honour inferred LCM committed to funding the proceeding itself. Importantly, the primary judge said (at [72]):

There is nothing to indicate that, prior to about 30 June 2013, LCM was provided with any detailed briefing by [Griffins] to enable it to consider funding either the investigation of a claim such as the present or to authorise and fund the conduct of this proceeding.

154    His Honour concluded (at [73]):

In short, having regard to Mr Griffin’s unequivocal assertion, I am not persuaded that any communication between [Griffins] and LCM, or records of those communications, prior to 30 June 2013 took place in circumstances where Mr Griffin or [Griffins] was acting as a solicitor on behalf of, or on instructions from, the applicants or other Group Members to pursue such a claim as the present. I consider that such communications up to that date were between LCM and [Griffins]/Mr Griffin to keep alive, and potentially to develop, the basis of a funding proposal to put to the applicants and Group Members so that they could consider whether to retain [Griffins] to investigate and conduct such a claim as the present. I accept that Mr Griffin for [Griffins] had an ongoing general solicitor/client relationship with Mr Ferluga over that period. I do not conclude that any communications concerning the “creditors” or the “investors” with LCM or IMF during that period were only on behalf of Mr Ferluga or his interests. I also do not conclude they were pursuant to retainers with other unspecified but generally interested potential applicants or Group Members.

155    The primary judge’s reference to “Mr Griffin’s unequivocal assertion” must be a reference to Mr Griffin’s statement in the First Griffin Affidavit that:

(a)    at the time that he first met with the investors (1 October 2009) he was “not then retained to act in regards [to] a representative proceeding or in any proceedings against BankSA”; and

(b)    “[d]uring the “Samra Bankruptcy Proceedings” [conducted over the period 23 August 2011 until 30 July 2013], Griffins Lawyers had not been retained by the Applicants or any of the Group Members (as this expression is defined at paragraph 4 of the Statement of Claim) in respect of this representative proceeding.”

156    The primary judge noted (at [75]) Mr Griffin’s evidence that from 1 October 2009 he spoke with investors, both individually and sometimes together, with a view to considering possible legal claims they may have, and that in dealing with the investors Griffins was acting in a professional capacity as a firm of solicitors and on a confidential basis. Mr Griffin said that “the material assembled [by Griffins] was to assist in the consideration of possible legal claims and to provide legal advice to investors, including dealings with LCM and IMF.”

157    His Honour said (at [76]) that it does not necessarily follow that a lawyer/client relationship existed between Griffins and all the investors it spoke to. His Honour cited Brookfield Multiplex Ltd v International Litigation Funding Partners Pte Ltd (No 2) (2009) 180 FCR 1; [2009] FCA 449 (Brookfield) at [19] (Finkelstein J) and said that a formal professional retainer is not required but there must be a professional relationship in pursuance of a request, express or implied, made of the lawyer in a professional capacity.

158    The primary judge concluded (at [78]) that:

The result of those conclusions is that, in respect of communications (or documents recording communications) between the applicants and group members and [Griffins] from 1 October 2009, and documents provided to [Griffins] by them, the documents are potentially eligible to be privileged from production on the ground of legal professional privilege only where it is clear that they were made for the purposes of the retainer with Mr Ferluga only or for a particular specific (but unspecified) retainer with some other person. In respect of communications between [Griffins] and LCM, until 30 June 2013, no legal professional privilege attaches, except where the communication was solely pursuant to the retainer with Mr Ferluga or to a client/lawyer relationship with others.

(Emphasis added)

159    At [80], the primary judge reiterated the conclusion that a lawyer/client relationship existed between the Ferluga entities and Griffins in the period from 1 October 2009 to 30 June 2013, being a retainer “generally to explore the prospects/recovery of their losses by investing in ALC, including by a claim against BankSA.”

160    In a passage which is central in the appeal, the primary judge said at [81]:

But I am not persuaded that generally there was any lawyer/client relationship with those who are now the applicants and/or Group Members to explore the prospects of recovery of their losses by investing in ALC, including by a claim against BankSA. If such relationships existed, they would have been readily established by records of the terms of the engagement, lists of the persons who had engaged (including impliedly) [Griffins] to investigate a claim, the recording of a running fee record, the submission of accounts or the payment of professional fees. The capacity to produce such material rested with [Griffins]. There is no evidence of any coherent record of those with whom [Griffins] had a client/lawyer relationship. Indeed, there is no evidence of a file kept in the name of Mr Ferluga, either alone or with others, or other files save for the D’Ortensia file (addressed later in these reasons, but in relation to which Mr Griffin has given no evidence). There is no evidence of [Griffins] having identified and recorded those “clients” to whom it had by an express or implied arrangement or relationship of trust and confidence: cf Archer Capital 4A Pty Ltd (as trustee for the Archer Capital Trust 4A) v Sage Group plc (No 3) (2013) 306 ALR 414; [2013] FCA 1160 at [65]… In my view, it is more likely that a number of persons who attended spasmodic meetings or spasmodically communicated with [Griffins] were hopeful of participating in a claim such as the present, but it was left to [Griffins] (but not pursuant to any arrangement, save perhaps with Mr Ferluga and a few others) to explore the assembly of data, the requirements of and prospects of securing funding, and the like, with a view then to putting a more specific proposal to the applicants (and the Group Members) about providing instructions to investigate, and if appropriate to institute and conduct, proceedings such as the present claim. That may not have been all of those with whom [Griffins] met, but I am not satisfied that there were none, or an insignificant number of such persons.

(Emphasis added)

161    The primary judge said (at [82]) that he was not persuaded on the evidence that the intentions of the investors with whom Griffins interacted prior to 30 June 2013, judged objectively, was to have a solicitor and client relationship with that firm. His Honour said (at [83]) that he did not expect detailed evidence from each of the investors or each of the authors of the various documents, or from each of the solicitors or employees of Griffins involved in dealings with those investors. However, in light of BankSA’s contention that Griffins was, for itself, instigating the investigations, the appellants could have adduced evidence to the contrary through Mr Griffin, through records of Griffins or through a small number of investors, and they did not.

162    His Honour held (at [84]) that the claims to advice privilege were not established at large, but instead only in relation to particular documents recording communications between Griffins and investors where a lawyer/client relationship was established.

163    The primary judge also said:

(a)    (at [134]), that a lawyer/client relationship did not exist to the extent asserted by the appellants;

(b)    (at [136]), that he generally concluded that, in its dealings with IMF and LCM, Griffins, through Mr Griffin, “is not shown to have been acting throughout in those dealings for any particular client or clients so as to entitle the applicants to claim privilege over all such records. My view is that he was not doing so consistently and exclusively”; and

(c)    (at [144]), that Mr Griffin said in his second affidavit that he was at all times acting in his professional capacity in the matters, meetings and communications with investors to which he referred, which matters meetings and communications were confidential. He says that all investors were dealing with him “as a solicitor and had the manifest intention of seeking legal advice or legal services in relation to their losses.” However, as the primary judge noted, in his first affidavit Mr Griffin said that until 30 June 2013, Griffins had not been retained by the appellants or other investors except in limited respects in regard to discrete matters.

164    The primary judge referred (at [141]-[142]) to the trust account statement, invoices and receipts (referred to at [136] above) which record payments by investors, including Mr D’Ortenzio, to Griffins for disbursements incurred by the firm in investigating the claims against BankSA.

165    His Honour concluded (at [145]):

Overall, I am not satisfied that the material to which I have been referred, including the above, exposes that [Griffins] at the material times was acting as solicitors for all the investors who attended the meetings from time to time, or who had an interest in the possible action against BankSA, that is that there was the required relationship of trust and confidence between [Griffins] and all of them. The contrary, in my view, is the more likely. That is, whilst Mr Ferluga (and perhaps a few others) had entered into a client/lawyer relationship with [Griffins], [Griffins] was itself exploring the prospects of such an action including the funding of such an action, at least to 30 July 2013 or thereabouts for them and others with whom it did not have such a relationship.

(Emphasis added)

166    The primary judge said (at [146]-[148]) that he drew that conclusion with some confidence because of the absence of any specific evidence from Mr D’Ortenzio or from any other person who contributed to Griffins’ trust account to pay disbursements in about late 2011. In addition, apart from the period from late 2011 to mid to late 2012, during which period the trust account monies were collected and disbursed, there was no evidence of any further request for the payment of fees monies, and any records in that regard could have been provided by Griffins. He said (at [148]) that:

There is no basis for knowing whether any particular communications concerned a particular “retainer” of [Griffins] by an investor for a particular purpose, or were pursuant to a client/lawyer relationship of the character referred to.

His Honour said (at [149]) that there is no basis for knowing, beyond the period covered by the trust account statement, invoices and receipts, whether the investors who contributed those funds had any prior or ongoing relationship with Griffins. If so, his Honour said one would expect that Griffins would have a basis for identifying those persons, the fee basis for doing the work it did, record of the fees charged or to be charged, or an agreement not to charge fees except in particular circumstances.

167    The primary judge also said (at [152]) that privilege was established in respect of certain communications on the basis of there being “an identified and specific client/lawyer relationship as distinct from an enquiry from, or a communication with, an investor or with LCM or IMF or for internal communications where the work is not specifically related to a particular client.” By reference to various document descriptions in the Privilege Schedule, the primary judge ruled that the privilege claims made in respect of a limited number of documents listed in Annexure 4 were made out, but not established in relation to the balance of the documents listed in that annexure.

The grounds of appeal

168    The Amended Notice of Appeal alleged:

Advice Privilege

1.    The learned Judge erred in law by failing to correctly apply the test to determine the existence of a solicitor-client relationship between GMG Legal Services Pty Ltd (GMG) (on the one hand) and the Appellants and group members (on the other) between 1 October 2009 and 30 June 2013:

1.1    The question in law was whether the Appellants and group members had come to stand in a relationship of trust and confidence with GMG. No retainer or engagement (formal or informal) with GMG was required (see Brookfield Multiplex Ltd v International Litigation Funding Partners Pte Ltd (No 2) (2009) 180 FCR 1 at [19]).

1.2    The Judge wrongly required proof of a retainer or engagement (or the indicia of a retainer or engagement) with GMG as a prerequisite to any finding about the existence of a solicitor-client relationship (Reasons [68], [73], [78] and [81]).

1.3    On the findings before the Court (Reasons [19], [40]-[41], [47]-[48], [56]-[65], [75], [93]-[94] and [129]-[150]), the learned Judge should have concluded that GMG was providing legal advice to the Appellants and group members about recovery of their lost investments from 1 October 2009 pursuant to a relationship of trust and confidence (cf Reasons [60], [68], [73], [76], [78], [81], [82], [84], [136], [138] and [145]-[146]).