FEDERAL COURT OF AUSTRALIA

Deputy Commissioner of Taxation v Nicholls (No 2) [2009] FCA 234

DEPUTY COMMISSIONER OF TAXATION v ARTHUR CHRISTOPHER NICHOLLS

SAD 137 of 2008

MANSFIELD J

12 MARCH 2009

ADELAIDE

REASONS FOR RULING

1                     In the course of addressing documents which the respondent claims to have been privileged, albeit seized pursuant to the search warrant, a table was prepared by him describing in categories a number of documents over which he claimed legal professional privilege.

2                     The applicant responded to that table by accepting his claim in a number of instances, but in two categories of documents (those numbered 15 and 001), it did not do so. The respondent was then given the opportunity to adduce such evidence as he may be advised to support the claim to privilege in respect of those categories.

3                     The respondent has produced a letter apparently from Julian Gyngell, solicitor and attorney of Wahroonga, New South Wales, addressed to the respondent as President of Citech Holdings Pty Ltd apparently enclosing the terms of a proposed solicitor client engagement and dealing with a costs agreement and associated matters. The enclosures to that letter dated 6 March 2006 were not produced.  There is no written evidence that the terms of engagement were accepted. The respondent has nevertheless asserted by affidavit of 15 January 2009 that the material in the two categories of documents in dispute relate to discussions between himself and the solicitors for Citech Holdings Pty Ltd and another Citech company, in particular with Mr Gyngell, in circumstances which (if that be correct), would attract legal professional privilege.

4                     There are six documents in the schedule in category 15 and two in category 001. 

5                     The onus is upon the respondent to prove that the communications which are recorded in the documents referred to under those categories occurred or arose on a privileged occasion.

6                     I am satisfied that, in respect of the period May 2007 to which the documents in category 15 relate, there existed a client-solicitor relationship between Citech Holdings Pty Ltd or one of the other Citech companies and Mr Gyngell. I am also satisfied that all but one of the documents in category 15 record communications which occurred on a privileged occasion between the respondent on behalf of Citech Holdings Pty Ltd or another Citech company and Mr Gyngell.  I so conclude based on the description of those documents in the respondent’s affidavit. However, the first document which is described in category 15 as “Internal Shareholders Briefing – CEO Report on US Shareholders (8/05/2007)” in my view does not accord with the description of the document to which the respondent refers in his affidavit, namely, “Report from me to Julian Gyngell on U.S shareholders’ claims dated 8 May 2007”. Clearly, a comparison of the description of the document in the schedule prepared by the respondent and in the document in his affidavit indicates that an Internal Shareholders Briefing – CEO Report is not of its nature inherently a document prepared for the purpose of procuring legal advice, nor clearly the document to which he was referring. I therefore do not uphold the claim for legal professional privilege in respect of that document in category 15.

7                     I also do not uphold the claim for privilege in respect of the two documents in category 001. The respondent’s affidavit asserts that category 001 is a series of emails between the respondent and Mr Gyngell concerning Citech Holdings Pty Ltd or another Citech company. However, one of the documents in that category could not be a series of emails at all, and the other is not apparently a series of emails between the respondent and Mr Gyngell. One is described as “Citech holdings – Research whiteboard discussion notes”. As I have noted, the Respondent has not referred to that document at all in his affidavit dealing with category 001 because he confined his evidence to a series of emails. The other is described as “SDS – Citech Emails”, “CDROM of emails between Citech & SDS”. There is no identification of what or who SDS is.  Nor is there any foundation for thinking that SDS is Mr Gyngell or his firm. There is, in fact, nothing in the material before me to suggest that SDS is either Mr Gyngell or his firm. In those circumstances, I do not uphold the claim for privilege in respect of the documents in category 001.

8                     Consequently, I uphold the claim for privilege in respect of the documents in categories 15 and 001 in the schedule prepared by the respondent only in respect of the documents described in category 15 as:

·                Term Sheet “3pm” Handwriting –

6 pages (4/05/2007)

·                Email Discussions – 4 & 8 May

2007/09:07 am & 8:11am (2

pages)

·                Spreadsheet of Whiteboard

discussions (undated) (2 pages)

·                Paper-clip 3 pages

“Nettina/Julian Gyngell

discussions re 4 May 2007 08:54am

·                08 May 2007 08:15am email re

Citech Conference Call

Associate:

Dated:         16 March 2009