FEDERAL COURT OF AUSTRALIA

Martin v Norton Rose Fulbright Australia (No 2) [2019] FCA 96

ORDERS

THE COURT ORDERS THAT:

1.    The applicant’s interlocutory application dated 19 October 2018 is dismissed.

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

REASONS FOR JUDGMENT

CHARLESWORTH J:

1    On 21 June 2018, Wigney J made an order for non-standard discovery in this action in terms proposed jointly by the parties. The applicant, Mr Martin, alleges that the respondent (a firm) has not disclosed all documents falling within the scope of the order. He also seeks an order for the production of some 267 documents over which the respondent claims legal professional privilege in whole or in part.

2    By interlocutory application dated 19 October 2018, Mr Martin sought 16 orders with respect to these and other issues. The issues arising on the interlocutory application and the conclusions I have reached are broadly summarised at [22] and [27] – [34] below. It follows from the conclusions expressed in those paragraphs that Mr Martin’s interlocutory application must be dismissed.

CONTEXT

3    It is convenient to begin with an explanation of the legal context in which Mr Martin’s interlocutory application is made.

4    Mr Martin is a former staff partner of the law firm Norton Rose Fulbright Australia (NRFA). His position in the partnership was terminated by NRFA on 15 July 2016.

5    On 5 August 2016, Mr Martin lodged an application in the Fair Work Commission (FWC), expressed to be made under s 365 of the Fair Work Act 2009 (Cth) (FW Act). I will refer to that application as the FWC proceeding.

6    Mr Martin named, as first respondent to the FWC proceeding, “Norton Rose Fulbright Australia (a Firm and all partners thereof)”. Four partners were individually named as the second to fifth respondents. By his initiating documents, Mr Martin alleged that, by dismissing him from his position, NRFA contravened ss 340, 345, 351 and 352 of the FW Act. Broadly speaking, those provisions prohibit a person from taking adverse action against another person because the other person has, or proposes to exercise, certain prescribed rights or because the person has a disability or family responsibilities. For the purposes of the FW Act, such an application is defined as a general protections application.

7    The adverse action alleged by Mr Martin was his “dismissal”.

8    Relevantly, a general protections application involving dismissal may be made by a person if the person’s employment with his or her employer has been terminated on the employer’s initiative: FW Act, s 365, and s 386(1)(a). When such an application is made, the FWC must deal with it: FW Act, s 368. If satisfied that all reasonable attempts to resolve the dispute (other than by way of arbitration) have not been (or are unlikely to be) successful the FWC must issue a certificate to that effect: s 368(3). A person entitled to apply to the FWC to deal with such a dispute must not make a general protections application to a court in relation to the dispute unless the FWC has issued a certificate in respect of it. A general protections court application commenced without a certificate having been issued by the FWC under s 368 of the FW Act is liable to be dismissed as incompetent: FW Act, s 370. See, for example Forbes v Petbarn Pty Ltd [2018] FCA 256 at [81] – [84].

9    The FWC proceeding was set down for a conciliation conference to take place on 20 September 2016. Leading up to that date, the parties entered into negotiations for the terms of a private mediation to resolve the underlying dispute. Around the same time, the respondents to the FWC proceeding informed Mr Martin of their intention to dispute the jurisdiction of the FWC to deal with it. They asserted that Mr Martin had not been in an employment relationship with NRFA. They also asserted that the operation of the FW Act did not in any event extend to NRFA in respect of its employees situated in Western Australia, the place where Mr Martin resided at the relevant time.

10    By a facsimile message transmitted on the morning of 19 September 2016, NRFA lodged for filing an action in the New South Wales District Registry of this Court naming the President and members of the FWC as the first respondent and Mr Martin as the second respondent: NSD 1610 of 2016. The initiating documents were not in fact accepted for filing in the Registry until 22 September 2016, after which they were served on Mr Martin. The documents served on Mr Martin were signed and dated 19 September 2016. As will soon become clear, these dates assume some importance in Mr Martin’s case.

11    By its application in this Court, NRFA sought a declaration to the effect that the FWC did not have jurisdiction to deal with the FWC proceeding and an order in the nature of prohibition to restrain the FWC from dealing with it or otherwise purporting to exercise jurisdiction in respect of it. The relief claimed also included an order for indemnity costs against Mr Martin. I will refer to this as the prohibition proceeding.

12    Late on the morning of 19 September 2016, the parties reached an agreement on the terms of the private mediation. The parties agreed that the conciliation conference scheduled for the following day in the FWC should be adjourned.

13    The private mediation was unsuccessful.

14    Mr Martin then withdrew the FWC proceeding on 17 October 2016. As a consequence, the substantive subject matter of the prohibition proceeding (being the challenge to the FWC’s jurisdiction) fell away, although no order has yet been made to finalise it. The only substantive question to be determined in the prohibition proceeding is the question of costs. That question has become complicated by Mr Martin’s commencement of this action on 17 February 2017.

15    In this action, Mr Martin alleges that the partners of NRFA engaged in, or are otherwise liable for, wrongful conduct in relation to the commencement of the prohibition proceeding amounting to (without being exhaustive) intentional deceit, abuse of process and misleading and deceptive conduct.

16    The allegations of wrongdoing are summarised elsewhere in these reasons in the context of Mr Martin’s challenge to NRFA’s privilege claims.

17    Mr Martin’s pleaded claims are founded in the tort of deceit and the intentional tort of abuse of process. He claims general, aggravated and exemplary damages at common law. Alternative relief is sought pursuant to the Australian Consumer Law (ACL), contained in Sch 2 to the Competition and Consumer Act 2010 (Cth) (CC Act). In accordance with s 131 of the CC Act, the ACL applies as a law of the Commonwealth in relation to contraventions of the ACL by corporations. It may also apply to non-corporate entities by virtue of the extended application provisions contained in s 5 and s 6 of the CC Act.

THE DISCOVERY ORDER

18    On 21 May 2018, Wigney J made orders in this proceeding requiring the parties to exchange lists of proposed categories for discovery and fixing a date by which any application for discovery was to be filed and served. The parties subsequently consented to an order in the following terms (discovery order):

1.    The Respondent give discovery pursuant to Division 20 of the Federal Court Rules 2011 (Cth) on or before 2 August 2018 of the following categories of documents:

a.    All documents in the control of the Respondents relating to the preparation, signing, filing, lodgement, issuing and service of NSD 1610/2016.

b.    All documents in the control of the Respondents relating to the fax transmission used to file NSD 1610/2016, as alleged at paragraphs 15 and 17 and Annexure ‘DC2-2’ of the Affidavit of David Cross affirmed 28 October 2016, including sender, recipient, header, start time, date, duration, protocol, network user, job history, audit log, image log, unique identifying number, matter number, billing code, transmission header text and meta data.

c.    All documents in the control of the Respondents relating to the communications on 19 September 2016 between David Cross and an unnamed lawyer in his team, as alleged at paragraph 13 of the Affidavit Cross of 18 October 2016; and paragraphs 3, 5 and 15 of the Affidavit of David Cross of 28 October 2016.

d.    All documents in the control of the Respondents relating to David Cross being directed:

i.    To ‘delay initiation of the Federal Court Proceedings’ in anticipation of a return call from Ms Boyd on 16 September 2016, as alleged at paragraph 14 and Annexure ‘DC12’ of the Affidavit of David Cross of 18 October 2016, and in the ‘Chronology of the Applicants – Costs’ dated 17 October 2016;

ii.    To initiate ‘steps to commence’ the within proceedings, as alleged in the penultimate sentence of paragraph 14 of the Affidavit of David Cross affirmed 18 October 2016;

iii.    To ‘file the Federal Court papers’ as alleged at paragraph 10 of the Affidavit of David Cross affirmed 28 October 2016 (at the base of page 4);

iv.    To ‘agree to the mediation’ as alleged at paragraphs 11 and 12 of the Affidavit of David Cross affirmed 28 October 2016; and

v.    That ‘it remained the intention of the Applicants for the Federal Court proceedings to be commenced’, as alleged in the penultimate and final sentences of paragraph 15 of the Affidavit of David Cross affirmed 28 October 2016.

e.    All documents relating to whether David Cross had the requisite independence from the issues in dispute to be capable of acting as an independent and objective legal practitioner in the FWC Application, NSD1610/2016 or SAD49/2017, including but not limited to: documents relating to the matters described at paragraphs 8, 9 and 10, and the particulars to paragraph 23, of the Further Amended Statement of Claim (FASOC).

f.    All documents relating to the decision to appoint, and to the appointment of, David Cross to act for the Respondents in relation to the FWC Application, NSD1610/2016 and SAD49/2017.

g.    All documents comprising the Respondents’ conflicts policy and procedure, including any risk-management or administrative documents required to be completed under its policy and procedure, and any documents that were actually completed for that purpose, in relation to the FWC Application, NSD 1610/2016 and SAD 49/2017.

h.    All documents relating to David Cross ceasing to act for the Respondents in NSD 1610/2016 and SAD49/2017 on 8 February 2017.

i.    All documents relating to any internal communications between partners and/or employees of the Respondents relating to the conduct or compromise of the FWC Application, NSD 1610/2016, and SAD49/2017.

j.    All documents relating to the Applicants’ proposal of mediation under the firm’s Constitution as alleged at paragraph 9 of the FASOC.

k.    All documents relating to the Respondents’ purpose and objectives in initiating NSD 1610/2016.

l.    All documents relating to the Workplace Express article published on 21 October 2016, including but not limited to:

i.    internal communications between the partners and/or employees of the Respondents; and

ii.    communications between the partners and/or employees of the Respondents and representatives of Workplace Express.

m.    All Documents relating to the purpose and objectives of the Respondents in making an application for costs in NSD 1610/2016 on 18 October 2016.

19    On 2 August 2018, NRFA served on Mr Martin a list of documents verified by an affidavit of Mr Peter Edmund Cash sworn on the same day. When both matters returned before Wigney J for case management on 4 October 2018, Mr Martin foreshadowed an application to agitate a number of interlocutory issues, including perceived deficiencies in NRFA’s discovery and a challenge to NRFA’s claims of legal professional privilege. His Honour made orders to the effect that Mr Martin file and serve any interlocutory application on or before 19 October 2018 and that, in the week prior, the parties correspond with a view to narrowing or resolving the issues. Dates were fixed for the filing of affidavit material and for the hearing of any interlocutory application Mr Martin may file. The date fixed for hearing was 6 December 2018. The hearing date was preserved upon the allocation of both matters to me.

THE INTERLOCUTORY APPLICATION

Orders sought

20    Mr Martin seeks orders in the following terms:

1.    An Order that the Respondents provide discovery in a manner which identifies under which specific category of discovery (as set out in the Orders of His Honour Wigney J made 21 June 2018) the document is discovered.

2.    An Order that the Respondent explain the basis upon which the ‘Document ID’ code utilised in its List of Documents was devised, including what each component represents.

3.    An Order that the Respondent disclose all documents relating to Mr Cross’ position, status and/or standing as a partner of the Respondents firm.

4.    An Order that the Respondents disclose an unredacted copy of document NRF.0006.0001.0012_Redacted

5.    An Order that the Respondents disclose all documents relating the administrative and procedural requirements to be undertaken when opening a file, including but not limited to:

  a.    any forms to identify the parties and their details;

  b.    any checklist for conflict issues;

  c.    any Know-Your-Client process;

d.    any requirement for formal approval/declaration by a partner (or similar) that it is appropriate to act;

e.    any documents relating to the ‘Compliance Process’ referred to in document NRF.0006.0001.0012_Redacted;

f.    a copy of the Conflict Policy (Know 30631) referred to in document NRF.0006.0001.0012_Redacted.

6.    An Order that the Respondents disclose all documents relating to compliance with the firm’s file opening processes for the following matters:

  a.    Matter number 2841675

  b.    Matter number 264051

c.    Any other file/matter number under which work relevant to the subject of these proceedings was performed by partners or employees of the Respondents’ firm.

7.    An Order that the Respondents disclose documents relating to the details and particulars of the files and matter numbers referred to at 7.a, 7.b and 7.c above.

8.    An Order that the Respondents disclose all documents relating to any internal communications between partners and employees of the Respondent, other than but including if necessary Mr David Cross, Mr Mayne Spanner, Mr Chris Mcleod, Mr Cameron Harvey and Mr Dylan McKimmie).

9.    An Order that the Respondents disclose any drafts of the letter dated from Mr Spanner to the Applicant 15 July 2016 refusing mediation under the firm’s constitution and any other communications preceding the firm’s refusal.

10.    An Order that the Respondents disclose any documents containing the content prepared for the media and referred to in document NRF.0011.0001.0712, together with any further documents evidencing content prepared for the media, or in relation to media coverage and comment generally.

11.    An Order that the Respondents produce to the Applicant the documents over which privilege is claimed (either in whole or in part, by way of redaction) in Parts 3 an 4 of their List of Documents.

12.    An Order that the Respondents produce an unredacted copy of the following documents:

a.    NRF.0006.0001.0179;

b.    NRF.0006.0001.0012.

13.    An Order that the Respondents file and serve an affidavit setting out the nature and extent of the ‘reasonable enquiries’ conducted by Mr Peter Cash as to the existence and location of the documents required to be disclosed by the Respondents, including the nature and extent of his enquiries as to the grounds for the claims of privilege which are made.

…

15.    An Order granting the Applicant leave to amend the following paragraphs of his claim: 31, 38.

…

21    Paragraphs 14 and 16 of the application are not pressed.

The hearing

22    At the hearing of the application on 6 December 2018 I gave ex tempore reasons for refusing to make orders in terms of [1] to [3] and [15]. At that time, the Court anticipated that the interlocutory application would be heard and determined within the single day on which it had been listed. As the hearing unfolded it became apparent that would not be possible. The hearing of the application was disrupted by Mr Martin’s decision to terminate the services of his solicitor during the hearing. That occurred before the luncheon adjournment on 6 December 2018. Thereafter, Mr Martin made submissions on his own behalf. Argument continued into a second day and judgment was reserved on the remaining issues.

23    I do not propose to repeat the reasons I have already given for refusing to make orders in terms of [1] to [3] and [15], except to the extent necessary to explain why the remaining orders should not be made.

24    Among other things, the Court has before it an affidavit of Mr Simon Mathew Bourne sworn on 19 October 2018, an affidavit of Mr Travis George Toemoe sworn on 2 November 2018, and two further affidavits sworn by Mr Toemoe on 5 December 2018. Annexed to these affidavits is a large amount of correspondence by which the parties have asserted their opposing positions in respect of multiple contentious issues, some of which have been resolved, most of which have not.  At the commencement of the hearing I informed the parties that I would not read the voluminous correspondence unless I was taken to some part of it for a specified purpose.  As explained to the parties, I have not taken the assertions in the correspondence to be in the nature of written submissions directed to the Court.

25    Neither party assisted the Court with written submissions, except to the extent explained at [162] below.

The orders sought in [4] and [12]

26    Mr Martin made no submissions in support of the application for an order in terms of [4] or [12], nor have I been provided with written submissions in respect of those proposed orders. Mr Martin has not otherwise directed me to any other document that would explain the factual and legal basis for seeking the orders. In the absence of supporting evidence and submissions I will not make orders in those terms.

Remaining issues

27    There are four broad issues remaining to be determined. The following paragraphs are intended to serve as a guide to the remainder of this judgment, which is to be understood as a whole. It is not intended to confine the reasoning on a particular issue to the particular paragraphs referred to.

28    The first issue is whether the Court should make orders requiring NRFA to discover and produce the documents described in [5] to [10]. In oral submissions, Mr Martin contended that these documents ought to have been disclosed in compliance with the discovery order. I have rejected that submission for the reasons given at [35] to [75] below.

29    The second issue is whether the Court should make the order sought in [13] of the interlocutory application. By that order, Mr Martin seeks to obtain further evidence to enable him to better scrutinise NRFA’s compliance with the discovery order and its privilege claims. My reasons for refusing to make that order culminate at [76] and [104] below.

30    The third issue is whether legal professional privilege attaches to the documents over which NRFA has asserted such claims.

31    A global challenge to privilege is made by [11] of the interlocutory application. The challenge proceeds from a number of footings. Among other things, it is submitted that the relationship between NRFA and its lawyers lacked a necessary feature of independence, such that the privilege claim in respect of any communications passing between them could not be maintained, whatever their purpose. These contentions are rejected for reasons given at [150] to [214].

32    Alternatively, it is submitted that at least some of the communications in respect of which privilege was claimed were brought into existence in the furtherance of a fraud (broadly defined), so as to fall within the principles stated in Attorney-General (NT) v Kearney (1985) 158 CLR 500 and R v Bell; Ex parte Lees (1980) 146 CLR 141. For the reasons given at [114] to [143] and [215] below, I am not satisfied that NRFA’s circumstances are such as to attract those principles and so displace the privilege.

33    The fourth issue is whether NRFA has waived privilege in communications making inconsistent claims in the list of documents and in comparison to claims made or not made in response to a notice to produce served upon it in 2016. I am not satisfied that privilege in any document has been waived. I explain why that is so at [144] to [149].

34    Mr Martin otherwise puts NRFA to proof of the facts necessary to support its privilege claim. I deal generally that question from [96].

THE AMPLITUDE OF DISCOVERY

35    In this Court, orders for discovery are not obtained as of right. A party must not give discovery unless the Court has made an order for it: r 20.12 of the Federal Court Rules 2011 (Cth). A party must not apply for discovery unless the making of the order sought will facilitate the just resolution of the proceeding as quickly, inexpensively and efficiently as possible: r 20.11. These rules reflect the overarching purpose of the Court’s civil practice and procedure provisions identified in s 37M of the Federal Court of Australia Act 1976 (Cth) (FCA Act) and the concomitant requirement that parties conduct litigation in this Court in a manner consistent with that purpose: Alanco Australia Pty Ltd v Higgins (No 2) [2011] FCA 1063 at [7] (McKerracher J); Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 2) [2011] FCA 1396 at [21] (Collier J) and Jones v Treasury Wines Estate Ltd (2016) 241 FCR 111 at [25] (Gilmour, Foster and Beach JJ).

The verified list

36    The list of documents served on Mr Martin is verified by the affidavit of Mr Peter Edmund Cash sworn on 2 August 2018. That affidavit forms annexure TGT-2 to the affidavit of Mr Travis George Toemoe affirmed on 2 November 2018.

37    Mr Cash is a partner of NRFA. He deposes to having made “reasonable enquiries as to the existence and location” of the documents referred to in the discovery order. He goes on to state (at [3]):

To the best of my knowledge, information and belief, there are no documents specified in the order that are or have been in the control of the respondent, other than the documents specified in this list of documents.

38    The purpose and significance of an affidavit verifying discovery was discussed by Mansfield J in Brookfield v Yevad Products Pty Ltd [2002] FCA 1376 at [21]. His Honour said that the purpose of verification was to ensure that the Court receives from the discovering party a reliable list of the documents in its possession, custody or power. His Honour continued:

… The verified list of documents is provided as if in answer to an imaginary interrogatory, and developed in the Courts of Chancery as a means of securing disclosure of potentially relevant documents without the physical intervention of the Court or of a third party to search for them. The responsibility of providing a reliable list of documents is a heavy one. The corollary of the Court’s acceptance of a verified list of documents is its willingness to accept the parties’ own statement as to the documents in its possession custody or power. Thus, a verified list of documents is generally conclusive of its contents. The Court is concerned to prevent a contest between two competing oaths that only a trial could resolve. See generally Bray, The Principles and Practice of Discovery, 1885, pp 127, 155, 220-223; Cairns, Australian Civil Procedure, Law Book Co., 5ed 2002, p 289. Although that position has been relaxed to some extent, the principle that a verified list of documents is generally conclusive of its contents has not been abolished. The Court will only order a further affidavit or permit cross-examination of a deponent of an affidavit verifying a list of documents in limited circumstances. An early expression of those exceptions can be found in Jones v Monte Video Gas Co (1880) 5 QBD 556 at 558 per Brett LJ:

‘either party to an action has a right to take out a summons that the opposite party shall make an affidavit of documents: when the affidavit has been sworn, if from the affidavit itself, or from the documents therein referred to, or from an admission in the pleadings of the party from whom discovery is sought, the master or judge is of opinion that the affidavit is insufficient, he ought to make an order for a further affidavit; but except in cases of this description no right to a further affidavit exists in favour of the party seeking production. It cannot be shown by a contentious affidavit that the affidavit of documents is insufficient.’

See also Mulley v Manifold (1959) 103 CLR 341; Fruehauf Finance Corporation Pty Ltd v Zurich Australian Insurance Ltd (1990) 20 NSWLR 359 per Giles J; Auspine Ltd v HS Lawrence & Sons Pty Ltd [1999] FCA 1749 per O’Loughlin J; Finance Sector Union of Australia v Commonwealth Bank of Australia Limited [2000] FCA 1389.

39    See also Spyer v Cuddles ‘N’ Mum (Franchise) Pty Ltd (No 3) [2002] FCA 1563 at [37] (Lindgren J).

40    On this application, it is not sufficient for Mr Martin to show that the documents now sought are relevant to an issue to be tried. It is reasonable to assume that the documents may be critically relevant. However, the Court is not asked to make a new order for discovery of critically relevant documents. Rather, it is invited to find that there is some doubt as to the adequacy of NRFA’s discovery such that the verification affidavit should not be regarded as conclusive of NRFA’s compliance with the order.

41    I commence my consideration of this question with some initial observations about the manner in which Mr Martin presented his arguments.

42    Mr Martin made no application to have Mr Cash attend for cross-examination on the verification affidavit, although he did seek an adjournment to “consider” whether Mr Cash and another deponent should be called. The adjournment application was refused, including for the reason that Mr Martin had ample opportunity to give consideration to whether Mr Cash should be cross-examined, the list of documents and verification affidavit having been served on him in August and better particulars of the documents provided in October.

43    Mr Martin did not suggest that the asserted deficiency in the amplitude of discovery was evident on the face of the verification affidavit itself, except in the very broad respects considered below.

44    Mr Martin did not put before the Court documents that had been produced to him (or documents otherwise in his possession), for the purpose of demonstrating a real concern that additional documents falling within the scope of the order were in existence and ought to have been discovered. Nor did Mr Martin adduce evidence of having personal knowledge of the existence or likely existence of further documents or classes of documents that fell within the scope of the order.

45    Even more unhelpfully, Mr Martin did not clearly align the orders now sought on the interlocutory application with any particular subparagraph of the discovery order so as to demonstrate non-compliance by NRFA. That is notwithstanding his insistence that the orders sought on the interlocutory application were not in the nature of additional discovery orders but rather orders to secure NRFA’s compliance with an extant order.

46    Mr Martin did not submit that the phrase “relating to” imposed a wider test of relevance than the direct relevance test applicable in the context of an order for standard discovery, nor did he ask the Court to infer that Mr Cash must have unwittingly or mischievously applied the wrong test. In light of what follows, it is unnecessary to dwell on the possibility of a different test applying.

47    Mr Martin urged the Court to adopt a holistic approach to the interlocutory application. He invited the Court to find that NRFA had deliberately frustrated the discovery process in ways that, considered together, supported an inference that it had deliberately sought to avoid its obligations or had otherwise shown an ambivalent attitude towards compliance. The circumstances, in Mr Martin’s submission, raised the “real prospect that the list of documents has been intentionally formatted and formulated in such a way as to obscure and conceal the documents that are actually produced and, henceforth, the searches that were undertaken”. As Mr Martin acknowledged, allegations of this kind are not to be made idly.

48    As I apprehend the submissions, Mr Martin relies upon at least five matters in support of what he acknowledged was a “cumulative and circumstantial conclusion” of non-compliance. They overlap to some extent with matters referred to in the oral reasons given for dismissing [1] and [2] of the interlocutory application. They also overlap to some extent with the circumstances relied upon by Mr Martin with respect to his challenge to NRFA’s privilege claims. As I have said, I determined [1] and [2] of the interlocutory application adversely to Mr Martin in the course of the hearing on 6 December 2018. Mr Martin submitted that the Court should reconsider the conclusions reached in respect of those paragraphs (as well as [3]), after reflecting upon his submissions as a whole.

49    Upon reflecting on the whole of Mr Martin’s submissions, I will not alter the conclusions I expressed at the hearing of 6 December 2018 in relation to [1] to [3] of the interlocutory application. To the extent that the circumstances relied upon by Mr Martin are relevant to the remaining issues, they are considered under sub-headings below. For the purpose of what follows, it will be necessary to repeat some of the things said in the course of giving oral reasons for refusing to make orders in terms of [1] and [2].

Alleged failure to categorise

50    Where (as here) it is alleged that a party has not complied with an order of the Court (including an order for discovery), it is necessary to identify the nature and extent of the obligation imposed by the order.

51    Argument proceeded on the basis that the discovery order required NRFA to discover documents falling within the “categories” identified in subparas (a) to (m) of the order. The use of the word “categories” must be understood in context.

52    Mr Martin complained that the list of documents served by NRFA did not specify into which “category” the discovered documents fell, by which he meant that the list was not formatted into sub-lists identifying the subparagraphs of the discovery order to which each document responded. This, he submitted, frustrated his ability to assess whether NRFA had complied with each subparagraph of the discovery order.

53    The order imposed an obligation on NRFA to give discovery of documents “in relation to” or that “relate to” certain topics: see, for example, subparas (c), (e), (f) and (g) of the discovery order. As Mr Martin acknowledged, the discovery of a document in NRFA’s possession or control may well “relate” to two or more of those topics. In that case, Mr Martin submitted, NRFA was obliged to either specify each topic to which the document related or format the list in a way that included a document more than once in its list, depending on the number of topics to which it related. The latter submission does not sit comfortably with Mr Martin’s complaint that there is already unnecessary duplication in NRFA’s list.

54    For reasons given in relation to [1] of the interlocutory application, I do not consider the order of Wigney J contemplated a list of documents being organised in that way, nor in any other way that specified the topic or topics to which each document related.

55    Whilst it may have been within the discretion of Wigney J to impose such an obligation, his Honour did not do so. Accepting that it is now within my discretion to make an order in terms of [1] of the interlocutory application I persist with the view that I should not do so. As Mr Martin submitted, the non-existence of documents bearing on a topic may well have some forensic significance at trial. However, Mr Martin is in as good a position as NRFA to identify which of the documents produced to him (if any) “relate” to which topic (or topics) identified in the discovery order, if he considers that exercise to be of utility in his preparations for trial.

56    Most importantly for present purposes, the circumstance that NRFA has not undertaken that task does provide a proper basis to question the evidence given in the verification affidavit as to the existence of documents in NRFA’s possession or control. Nor do they demonstrate an ambivalent attitude towards compliance more generally.

Alleged duplication

57    Mr Martin submitted that the list of documents was replete with duplications so as to be confusing and oppressive.

58    It may be accepted that an unusual degree of duplication in a list of documents may give rise to a concern that the discovering party has not attended to the task of discovery with diligence or solemnity or that, in extreme cases, the discovering party has sought to confuse an opponent and so conceal non-compliance with a discovery order.

59    The difficulty for Mr Martin is that he sought to make good his allegations by referring to descriptions in the list of documents, rather than by taking the Court to the documents themselves. Examples of alleged duplications are listed in a schedule prepared by Mr Martin (since marked MFI 1) to which I have had regard. The examples relate to documents subject to privilege claims that have not been produced to Mr Martin at all. I am not satisfied by reference to the descriptions alone that NRFA has discovered duplicated documents. A document may bear an identical description as another, particularly if it takes the form of correspondence passing between the same persons by the same means on the same date, or if it evidences different recipients responding to an email string, bearing the same title and into which common recipients are copied. As I have said, Mr Martin did not take the Court to the produced documents themselves so as to demonstrate oppressive duplication within them, despite the Court’s repeated suggestions that he should do so.

60    Mr Martin invited the Court to read the third affidavit of Mr Toemoe sworn on 5 December 2018 which, he said, contained evidence supporting his assertion of deliberate duplication. That affidavit contains a concession that there is unnecessary duplication across three documents. The concession does not support Mr Martin’s contention that NRFA has intentionally frustrated or abused the discovery process, whether by exaggerating the amplitude of its discovery, concealing non-compliance or otherwise.

61    As discussed below, I have inspected the documents in respect of which privilege claims are made. I do not detect duplication of the kind complained of by Mr Martin, except to the benign extent that the same email string may appear numerous times as a normal consequence of forwarding or replying to the latest message in an ever-stretching email thread.

Blank and meaningless documents

62    Mr Martin complained that the list of documents contains documents that are blank or otherwise meaningless. He submitted that the inclusion of this material “was done intentionally to make the process of discovery more difficult” for him. NRFA accepts that there are a number of html, plain text files or image files that are either blank or that do not relate to any subject matter referred to in the discovery order.

63    The meaningless files contain phrases such as “sent from my iPhone”, or images such as corporate logos of the kind that appear below signatures contained in an email. All of the documents of an html file type are blank. These items are aptly described by Mr Martin as dross.

64    However, it does not follow that the process of discovery has been frustrated or abused, nor does it follow that the orders now sought on the interlocutory application should be made.

65    Most of the documents described in the list comprise email communications. The documents are itemised in a way that ascribes a document number to the principal email communication, and separate document numbers to attachments, embedded images or html files within the same email. It was not necessary for NRFA to separately itemise the attachments or embedded files in that way. An email transmission may permissibly be identified singularly in a list of documents in a way that includes its attachments (or other embedded document types such as jpg files, plain text files, html files and the like), provided that the communication comprised in the email is adequately described as a whole or within a bundle of documents of the same type or character. The separate itemisation of the attached or embedded files was unnecessary and, I accept, subjectively aggravating to Mr Martin.

66    However, the inclusion of blank and meaningless documents is neither prevalent, nor is it unexplained. In my view, their inclusion does not support an inference of obstruction or frustration, and nor does it support an inference that NRFA has been deficient in the amplitude of its discovery. I particularly reject Mr Martin’s submission that the separate numbering of these items supports an inference that Mr Cash could not have undertaken reasonable searches for documents that responded to the discovery order. If anything, their inclusion supports an inference that NRFA has been overly particular in the itemisation of the documents in its list.

Document identification numbers

67    NRFA’s list of documents contains 687 separately numbered items. Each numbered item is ascribed an additional document identification number which, according to NRFA, is a number generated by its electronic document management system. Mr Martin complains that NRFA has given no explanation as to how the document identification number is derived. He further complains that by using document identification numbers, NRFA has adopted a convention applicable to the giving of discovery electronically in the absence of an agreement between the parties to proceed in that way.

68    I have difficulty understanding the significance of this complaint. The documents are numbered conventionally. To the extent that Mr Martin asserts that the inclusion of a unique document identification number conceals within it information concerning NRFA’s assessment of the factual issues to which the documents relate (which is speculative), he has not established an entitlement to know that information. Even if the document identification number had some forensic significance for Mr Martin at trial, in my view that does not assist him to demonstrate how the orders for discovery of the additional documents now referred to in the interlocutory application are justified. If Mr Martin is confused or prejudiced by the inclusion of additional document identification numbers, the appropriate remedy would be to order NRFA to serve a list of documents that does not contain them. Mr Martin did not seek such an order.

Lack of independence

69    The arguments asserting a lack of independence on the part of NRFA’s legal advisers are given detailed consideration in the context of NRFA’s legal professional privilege claims. Insofar as Mr Martin relied on the same arguments to assert deficiencies in the amplitude of NRFA’s discovery so as to justify orders in terms of [5] to [10] or [13], the connection between independence and adequacy of discovery is not entirely clear. I reject his submissions.

Alleged failure to comply with a notice to produce

70    In 2016, Mr Martin served on NRFA a notice to produce in the prohibition proceeding. In response, NRFA claimed privilege to resist the production of certain documents. Mr Martin asserts that NRFA has not fully complied with the notice to produce, and that it has made inconsistent claims of legal professional privilege in response to the discovery order.

71    To the extent that Mr Martin asserts non-compliance with the notice to produce per se, his allegation of non-compliance is not made out on the materials before me. I was not specifically taken to the notice to produce, although Mr Martin asserted that I could “access” it. He did not make submissions to make good the proposition that any category of document required to be produced on the notice was equivalent to any part of the discovery order. Mr Martin did not take me to the documents produced in response to the discovery order so as to demonstrate that the same documents should have, but were not, produced in response to the earlier notice. On the material before me, I am unable to make a finding that NRFA did not comply with the notice to produce served on it in 2016.

72    The alleged waiver of privilege arising from the notice to produce procedure raises a separate issue. It is dealt with elsewhere in these reasons.

Conclusion

73    The circumstances upon which Mr Martin relied do not gain persuasive force when considered in their totality.

74    As I have said, Mr Martin’s submissions did not assist the Court to comprehend how documents of the kind referred to in [5] to [10] fall within the scope of the discovery order. The application for orders in terms of those paragraphs must fail for that reason alone. Assuming the documents now sought do fall within the scope of the discovery order, no proper basis for going behind the affidavit of Mr Cash in respect of the existence of documents described in the order has been shown.

75    Mr Martin did not otherwise invite the Court to make additional orders for discovery so as to obtain the documents described in [5] to [10] by that means. On such an application it would have been necessary to persuade the Court that an additional discovery order should now be made, having regard to the case management history of this proceeding and the requirements of r 20.11 of the Rules and s 37M of the FCA Act. As Mr Martin expressly disavowed any intention to apply for an order for discovery of additional documents, it is unnecessary to consider the exercise of the Court’s discretion in that regard.

76    For the same reasons I am not satisfied that an order should be made in terms of [13] of the interlocutory application, insofar as it refers to the searches undertaken by Mr Cash as to the existence and location of documents that respond to the discovery order. I am not satisfied that there is cause for concern that the searches for documents falling within the scope of the order were deficient.

PRIVILEGE

77    Having regard to the issues to be tried, it is not surprising that a claim of privilege extends to documents that are critically relevant to the issues to be determined at trial. In some respects, the factual questions arising for consideration on this interlocutory application coincide with the factual issues to be determined at trial. The nature of Mr Martin’s challenges to the privilege claims is such that it has not been possible to determine the interlocutory application without expressing some views about the same or similar matters that are to be finally determined by a trial judge. It should be emphasised that the findings and conclusions expressed below are made at an interlocutory stage and upon the limited materials to which I was referred in the course of argument.

78    It is necessary to begin with some general statements of principle.

General principles

79    In a pre-trial context, it is the common law test for legal professional privilege that applies: Esso Australia Resources Ltd v Federal Commissioner of Taxation (1999) 201 CLR 49 at [17] – [28] (Gleeson CJ, Gaudron and Gummow JJ), [64] (McHugh J). At common law, privilege attaches to confidential communications between a lawyer and client made for the dominant purpose of obtaining or giving legal advice or assistance, or to aid in the conduct of actual or anticipated litigation: Esso at [61]. Litigation will be anticipated when there is a real prospect of legal proceedings being commenced. It is not enough to show that proceedings are possible: State of New South Wales v Jackson [2007] NSWCA 279.

80    In Grant v Downs (1976) 135 CLR 674 at 685, Stephen, Mason and Murphy JJ described the rationale for the privilege attaching to legal advice as follows:

The rationale of this head of privilege, according to traditional doctrine, is that it promotes the public interest because it assists and enhances the administration of justice by facilitating the representation of clients by legal advisers, the law being a complex and complicated discipline. This it does by keeping secret their communications, thereby inducing the client to retain the solicitor and seek his advice, and encouraging the client to make a full and frank disclosure of the relevant circumstances to the solicitor. The existence of the privilege reflects, to the extent to which it is accorded, the paramountcy of this public interest over a more general public interest, that which requires that in the interests of a fair trial litigation should be conducted on the footing that all relevant documentary evidence is available.

81    The “dominant purpose” of a communication is “the ruling, prevailing, or most influential purpose” for the communication being made: Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404 at 416 (Brennan CJ, Dawson, Toohey, Gaudron, Gummow and Kirby JJ). The purpose for which a communication is brought into existence is a question of fact to be determined objectively, although evidence of the subjective motivations of a party to the communication will be relevant, if not decisive: Esso at [172].

82    In Balabel v Air India [1988] Ch 317 Taylor LJ said (at 330):

Privilege obviously attaches to a document conveying legal advice from solicitor to client and to a specific request from the client for such advice. But it does not follow that all other communications between them lack privilege. In most solicitor and client relationships, especially where a transaction involves protracted dealings, advice may be required or appropriate on matters great or small at various stages. There will be a continuum of communication and meetings between the solicitor and client. The negotiations for a lease such as occurred in the present case are only one example. Where information is passed by the solicitor or client to the other as part of the continuum aimed at keeping both informed so that advice may be sought and given as required, privilege will attach. A letter from the client containing information may end with such words as ‘please advise me what I should do’. But, even if it does not, there will usually be implied in the relationship an overall expectation that the solicitor will at each stage, whether asked specifically or not, tender appropriate advice. Moreover, legal advice is not confined to telling the client the law; it must include advice as to what should prudently and sensibly be done in the relevant legal context.

83    Balabel was cited with approval by Allsop J (as he then was) in DSE (Holdings) Pty Ltd v InterTAN Inc (2003) 135 FCR 151. By reference to that and other authorities, his Honour said (at [52]):

…  the obligation of the lawyer to advise, once retained, is pervasive. It would be rare that one could, with any degree of confidence, say that a communication between client (or agent) and lawyer, in the circumstances of a retainer requiring legal advice and the directing of the client by a legal adviser, was not connected with the provision or requesting of legal advice. … too literal a requirement of identifying legal advice as express advice about the law would place undue emphasis on formalism and undermine the privilege.

84    It is for the party claiming the privilege to prove the facts necessary to support the claim: Grant v Downs at 689 (Stephen, Mason and Murphy JJ). Privilege is not “necessarily or conclusively established by resort to any verbal formula or ritual”: Grant v Downs at 689; National Crime Authority v S (1991) 29 FCR 203 at 212 (Lockhart J).

85    Where it is alleged that privilege previously existing in a communication has been waived, the onus is on the person asserting the waiver: Nine Films & Television Pty Ltd v Ninox Television Ltd (2005) 65 IPR 442 at [21] (Tamberlin J). As Gleeson CJ, Gaudron, Gummow and Callinan JJ said in Mann v Carnell (1999) 201 CLR 1 at [28], it is the client who is entitled to the benefit of confidentiality residing in documents that the privilege exists to protect, and it is the client who may relinquish that entitlement. Their Honours continued (at [28] – [29]):

28.    …  It is inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege. Examples include disclosure by a client of the client’s version of a communication with a lawyer, which entitles the lawyer to give his or her account of the communication, or the institution of proceedings for professional negligence against a lawyer, in which the lawyer’s evidence as to advice given to the client will be received.

29.    Waiver may be express or implied. Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. When an affirmative answer is given to such a question, it is sometimes said that waiver is ‘imputed by operation of law’. This means that the law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the subjective intention of the party who has lost the privilege…  What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large.

86    See also Goldberg v Ng (1995) 185 CLR 83 at 95 – 96.

87    Privilege will not attach to communications coming into existence for purposes that are anathema to the rationale for its existence. Wilson J in Kearney expressed the principle as follows (at 524):

… generally speaking, the public interest in the protection of alleged confidential professional communications will not be outweighed by the public interest in ensuring that all relevant evidence is admissible save when the professional relation is abused in a manner involving dishonesty that goes to the heart of the relationship. The presence of such dishonesty is enough to cause the privilege to ‘take flight’, to use the words of Cardozo J in Clark v United States, because it precludes a true professional relationship from arising: see the remarks of Stephen J in Cox and Railton. A passage from the judgment of Isaacs J in Varawa v Howard Smith & Co. Ltd. is in point. His Honour said:

‘The words ‘or the perfect administration of justice’ are all important, because, as was pointed out by Turner V-C in Russell v Jackson, the privilege which protects any confidential disclosure between solicitor and client is not intended simply to protect that confidence, but it rests upon the necessity of carrying it out. Otherwise justice could not be administered, as the Courts would not have the proper opportunity and means of administering the law between the litigants. That being the foundation of the rule, says the learned Vice-Chancellor, the Court must, of course, have regard to the foundation on which it rests, and not extend it to cases which do not fall within the mischief which it is designed to protect.’

88    This exception is not confined to cases of crime and fraud “even in the wide sense in which ‘fraud’ has been used in this context, unless the meaning of that word is extended to include anything that might be described as a fraud on justice”: Kearney at 514 (Gibbs CJ).

89    Information given to a solicitor in circumstances where the client seeks advice to frustrate or disobey a court order or to otherwise frustrate the course of justice: see, for example, Bell; Ex parte Lees.

90    The standard of evidence required to displace the privilege is not entirely clear on the authorities. The question is considered by Dr Ronald J Desiatnik in his text Legal Professional Privilege in Australia (3rd ed, LexisNexis Butterworths Australia, 2017) at pp 163 – 165. I gratefully extract the author’s summary of authorities (sans footnotes) as a correct expression of the state of the law:

How far must an applicant go to establish that privilege has been lost through the crime/fraud exception? The standard of proof required is certainly higher than ‘merely an allegation … of a fraud’, for it ‘is a serious thing to override legal professional privilege where it would otherwise be applicable’. On the other hand, ‘something less than the full proof of illegality must suffice’, otherwise the consideration of this issue could turn ‘into a full-scale trial of the suggested illegality’, a situation which could only be described in terms of ‘complete unacceptability’.

Judicial opinion on what this middle road should be has ranged from proof of ‘a strong probability that there was fraud’, to a requirement of ‘strong evidence [to] do away with the privilege’, to simply ‘something to give colour to the charge’. In Australia, however, the law has settled on requiring that the ground for alleging that legal professional privilege has been lost must be clearly stated, as ‘vague or generalised contentions of crimes or improper purposes will not suffice’. Then, ‘there must be some evidence that gives substance to the allegation of crime or fraud’ — some ‘material raising an arguable case that the relevant communications were made for the purpose of furthering or assisting a crime or fraud’. In short, the party resisting the claim for privilege must make out a ‘prima facie case’ that reasonable grounds exist ‘for believing that the communication … was made for some illegal or improper purpose’ (emphasis added). As can be seen, ‘the threshold for finding a prima facie case is not necessarily a stringent one’, although more is required to displace a claim to legal professional privilege than ‘merely by making an allegation’.

That much is settled. However, in answer to the question as to the nature of the evidence that can be put forward to prove the crime/fraud exception, the most recent relevant High Court decision contains a veritable smorgasbord of judicial opinion. In Commissioner of Australian Federal Police v Propend Finance Pty Ltd, the central issue was the trial judge's acceptance of evidence as sufficient to overcome the claim for legal professional privilege through reliance on the crime/fraud exception to the doctrine. The Full Federal Court unanimously held that such evidence was hearsay and thus inadmissible, rendering the establishment of the exception without any basis. In the High Court, Dawson J held that hearsay evidence was admissible to establish the exception, and Toohey J, although he felt the evidence before the trial judge should not be classed as hearsay, nevertheless came to the same conclusion as Dawson J. Brennan J seemed to concur with that conclusion in as much as he found that ‘evidence of ulterior purpose must be admissible’, while a clear but opposite view was expressed by McHugh J.

The challenge to privilege - summary of Mr Martin’s case

91    Mr Martin generally puts NRFA to the task of establishing the facts necessary to support its privilege claims.

92    In addition, Mr Martin asserts a lack of independence on the part of NRFA’s legal representatives, particularly Mr David Cross, the person who represented NRFA in the FWC proceeding and the prohibition proceeding.

93    It is also submitted that the circumstances fall within the public policy exception explained by the High Court in Kearney in that the communications to NRFA were brought into existence in furtherance of what Mr Martin termed a “fraud on the Court”.

94    To understand these latter arguments it is necessary to identify the facts alleged by Mr Martin that are said to give rise to what he says is a colourable case of fraud and that also bear upon the arguments as to independence. Given the seriousness of the allegations I should emphasise that NRFA denies critical facts (particularly as to chronologies of events and states of mind). It also disputes critical issues such as the existence of actionable representations, causation and certain facts necessary to establish the ACL claim. The evidence said by Mr Martin to give colour to the allegations is considered later in these reasons.

95    Mr Martin’s allegations in the underlying proceeding, as understood from the pleadings and his oral submissions, are to the effect that:

(1)    At the time that an agreement for the conduct of the private mediation had been reached by the parties, the initiating documents in the prohibition proceeding had been faxed to the New South Wales District Registry of this Court for filing but not yet accepted for filing by the Registrar: see generally rr 2.21(1)(c), 2.22, 2.25(1) and 2.27 of the Rules.

(2)    At the time that the terms for the conduct of a private mediation were agreed, a partner of NRFA, Mr  Cross, represented to Mr Martin’s solicitor that NRFA had put a stop to the filing of the prohibition proceeding.

(3)    Mr Martin agreed to participate in the private mediation on that basis.

(4)    The initiating documents were nonetheless accepted for filing and then served on Mr Martin. Service occurred on 23 September 2016.

(5)    In correspondence accompanying the served documents, Mr Cross represented that there was nothing NRFA could have done to avoid the acceptance of the documents for filing (and hence the commencement of the prohibition proceeding).

(6)    Mr Martin was intentionally deceived into believing that the commencement of the prohibition proceeding could not have been avoided by NRFA.

(7)    NRFA had not in fact put a stop to the filing of the documents, but instead had taken positive steps to secure the acceptance of the initiating documents by the Registrar, including by paying a filing fee.

(8)    The initiating documents were accepted for filing by the District Registrar on 22 September 2016 without a lawyer’s signature endorsed on the originating application.

(9)    On 22 September 2016, Mr Cross applied his signature and the date 19 September 2016 to the originating application after it had been sealed by the Court and so deliberately altered an initiating process.

(10)    By his email correspondence and by applying his signature and dating the document, Mr Cross intended to deceive Mr Martin into persisting with the private mediation, to gain leverage in settlement negotiations and so cause him to compromise his position in the underlying dispute.

(11)    Had Mr Martin known that NRFA did not put a stop to the filing of the prohibition proceeding, he would not have participated in the private mediation and he would not have withdrawn the FWC proceeding. He would instead have obtained a certificate under s 368(3)(c) of the FW Act and commenced a general protections court application in this Court.

(12)    The commencement and continuation of the prohibition proceeding (including NRFA’s persistence with its costs application) of itself constitutes an actionable abuse of process for which damages are payable.

Evidence bearing generally on the privilege claim

96    NRFA’s list of documents is organised in five parts. Claims for privilege are made in respect of the documents contained in Parts 3 and 4. In his verification affidavit, Mr Cash says, of those documents:

6.    The documents set out in part 3 are in the control of the respondent but I claim privilege from production of each of these documents on the grounds that they are:

(a)    confidential documents recording or evidencing confidential communications, or from which the content or substance of such communications could be inferred or revealed, between the respondent and its counsel, made for the dominant purpose of providing the respondent with professional legal services relating to this proceeding, the FWC application and/or proceeding no. NSD1610/2016; or

(b)    documents that are, or that would reveal the contents of, confidential documents prepared for the dominant purpose of providing the respondent with professional legal services relating to this proceeding, the FWC application and/or proceeding no. NSD1610/2016.

7.    The documents set out in part 4 are in the control of the respondent. Parts of some documents in part 4 are redacted. I object to producing unredacted copies of those documents on the ground that the redacted parts are privileged, and I claim privilege from production of each of these documents on the grounds that those parts:

(a)    record or evidence confidential communications, or from which the content or substance of such communications could be inferred or revealed, between the respondent and its counsel, made for the dominant purpose of providing the respondent with professional legal services relating to this proceeding, the FWC application and/or proceeding no. NSD1610/2016; or

(b)    reproduce, or would reveal the contents of, confidential documents prepared for the dominant purpose of providing the respondent with professional legal services relating to this proceeding.

97    At the request of Mr Martin, NRFA reproduced Parts 3 and 4 of the list so as to include a more detailed description of the documents subject to its privilege claims. The revised list now forms a part of annexure TGT3-8 to the third affidavit of Mr Toemoe sworn on 5 December 2018. That is one of two affidavits sworn by Mr Toemoe filed on that day, being the day before the hearing.

98    Mr Martin complained that he was prejudiced by the late filing of Mr Toemoe’s second and third affidavits. He sought an adjournment of the hearing for the purpose of deciding whether he would seek to have Mr Toemoe attend for cross-examination. It was not suggested at the time of the adjournment application that more time was needed to consider whether any objection should be made to the admissibility of Mr Toemoe’s affidavits or any part of them. The adjournment application was refused for reasons I gave orally at the hearing. Mr Martin later complained that he had not been given sufficient time to consider whether he should object to the admissibility of the affidavits, however he did not make an application for an adjournment by reference to that complaint.

99    In light of the unsuccessful adjournment application, the Court will expressly identify the use (if any) to which the evidence of Mr Toemoe has been put in the resolution of the contentious issues. As will be explained, I have afforded very limited weight to the evidence of Mr Toemoe or, for that matter, Mr Cash in respect of facts affecting contentious issues such as independence and dominant purpose.

100    The fact that NRFA reproduced Parts 3 and 4 of the list of documents in a form containing better descriptions of the documents is hardly contentious. The revised list was provided to Mr Martin on 19 October 2018. It has been in his possession for some time.

101    In my view, the descriptions themselves do not greatly assist with the task of assessing the privilege claim. In the case of email communications, the description does little more than to recite the subject line of the email communication and the parties to it. Although the senders and recipients of the communications are named, there is nothing to identify the capacity in which the persons were acting, nothing to identify the dominant purpose of the communication and, to the extent that the communications came into existence for the dominant purpose of pending or anticipated litigation, nothing to identify the litigation (except in cases where this may be inferred from the subject line of the email). Assertions of fact in connection with these issues are to be found in the verification affidavit rather than in the document descriptions.

102    I find the evidence of Mr Cash to be lacking in factual detail. He goes no further than to globally describe all of the documents in Part 3 and all of the redacted portions of the documents in Part 4 by reciting a verbal formulae. There is no evidence as to the enquiries Mr Cash may have undertaken to satisfy himself of the facts necessary to support the claim of privilege. His conclusions are globally stated in that they do not identify which senders or recipients of the communications are lawyers, and which senders or recipients are clients. Nor does Mr Cash identify which documents came into existence for the purpose of pending or anticipated legal proceedings. It may be that Mr Cash drew inferences from the documents themselves, without further enquiry. The Court cannot know. The underlying facts supporting his conclusions are not stated.

103    Mr Toemoe is a partner of the law firm King & Wood Mallesons. He has, since 10 October 2018, been the solicitor with the conduct of this proceeding and the prohibition proceeding on behalf of NRFA. To the extent that he gives evidence about matters prior to that date, he does so based on his review of documents.

104    Notwithstanding the deficiencies in the affidavit of Mr Cash, I do not consider it appropriate to make an order in terms of [13] of the interlocutory application requiring him to file and serve a further affidavit deposing to the grounds on which the claims of privilege were made. In declining to make the order, I have had regard to the proximity of the trial date and the time that NRFA has had to consider the application for that order. NRFA has filed the evidentiary material upon which it relies in support of its privilege claim, no doubt bearing in mind the onus that it bears on certain questions relating to the privilege. It was open to NRFA to cause Mr Cash swear a further affidavit, but it has declined to do so. As mentioned, I have derived little assistance from the evidence of Mr Cash and Mr Toemoe and will proceed to draw my own conclusions based on the evidence before me and the content of the documents themselves.

105    Paragraphs 10 and 12 to 23 of Mr Toemoe’s third affidavit give a narrative of the correspondence passing between the parties in relation to the privilege claims. Some of the correspondence is annexed to the affidavit and some of it is duplicated elsewhere in the evidence. The correspondence speaks for itself. Its fact and content is neither controversial, nor is it particularly helpful in assessing substantive issues.

106    Paragraphs 25 and 26 refer to certain parts of the pleadings in this action. Although the pleadings are relevant, they too must speak for themselves.

107    Paragraphs 11 and 28 to 39 concern a review Mr Toemoe caused to be undertaken within his firm in relation to the documents over which privilege is claimed. I accept that a review of the privilege claims was in fact conducted.

108    In relation to the documents listed in Part 3, Mr Toemoe says that he directed a solicitor employed in his firm to assess the claims for privilege and to identify for his own review any documents which “warranted closer scrutiny”. According to Mr Toemoe, the solicitor brought 39 documents to his attention for his further review. The solicitor “reported that she was satisfied that privilege had been properly claimed over the balance of the documents”. No evidence is given as to how the solicitor’s state of satisfaction was reached.

109    This evidence assists NRFA to overcome a criticism that might otherwise be levelled at Mr Cash’s degree of independence in verifying a list of documents on NRFA’s behalf. However, Mr Martin did not make any submissions based on a lack of independence on the part of Mr Cash as the person verifying the list.

110    By paragraphs 29 to 31, Mr Toemoe describes the documents by reference to their senders and their recipients and asserts the dominant purpose for which they came into existence. In the absence of evidence to the contrary, I find that the enquiries made by Mr Toemoe and the solicitor who first reviewed the documents went no further than a consideration of the content of the documents themselves. That is not an illegitimate means of assessing whether a claim of privilege can be maintained in a document. However, in this case the documents are available for inspection by the Court itself. As will be explained, there are compelling reasons to inspect them. The Court should draw (or decline to draw) its own inferences from the documents without deference to the inferences drawn or conclusions reached by NRFA’s solicitors by reference to the same material.

111    The same may be said of Mr Toemoe’s evidence in relation to the documents contained in Part 4. It is said that two solicitors conducted a review of those privilege claims, identified some documents requiring further review by Mr Toemoe and otherwise “reported that they were satisfied that privilege had been properly claimed over the balance of the documents”. Again, there is no evidence as to how the solicitors’ state of satisfaction was reached.

112    Upon Mr Toemoe’s own review, confidentiality in some redacted communications in respect of which privilege had been claimed were identified as having been waived by reason of inconsistencies in redactions to documents within Part 4 of the list.

113    Once again, it may be assumed that neither Mr Toemoe nor the two solicitors satisfied themselves of the facts necessary to support the privilege claimed in the redacted material, other than by reference to the material itself.

Evidence and conclusions concerning on the policy exception

114    As to the allegation that the documents came into existence in the furtherance of a fraud (broadly defined), or that they otherwise fell within a public policy exception, Mr Martin submitted that the privilege claim would be displaced if he could show a “colourable case”.

115    For NRFA it was submitted that the Court could and should not make substantive findings about the allegations, as they were matters properly left for determination at trial. Little more was said of the applicable principles, especially as they apply in a case in which the wrong that is the subject matter of the suit is the same wrong that is said to displace the privilege.

116    Generally speaking, I am prepared to accept the proposition that if the objective conduct alleged by Mr Martin was in fact engaged in, and if the conduct was engaged in with the intention of abusing the processes of this Court or frustrating the course of justice in the FWC, or otherwise with the deliberate intent of inducing and deceiving Mr Martin to compromise his position in a proceeding, then the privilege would “take flight”.

117    Critical to that proposition is the element of dishonest intent.

118    Before turning to the evidence, I should note that in advance of the second day of the hearing, Mr Martin sent a series of emails to my Associate including references to material to which he might refer in the course of the hearing. I have not read the material contained in or referred to in Mr Martin’s email correspondence to my Associate, except to the extent that he specifically referred to the materials in the course of the hearing.

119    The material referred to by Mr Martin is as follows:

(1)    Annexure DC12 to the affidavit of Mr Cross sworn on 18 October 2016;

(2)    Annexure MDH-10 to the affidavit of Mr Michael Harmer sworn on 25 October 2016;

(3)    Specific documents obtained by Mr Martin in the discovery process; and

(4)    The originating application in the form that it appears on the Court record in the prohibition proceeding.

120    The discovered documents upon which Mr Martin relied were not marked as exhibits in the course of the hearing. They are now bundled and marked Exhibit 1. Included in the bundle is a printout of a facsimile report to which Mr Martin referred in his submission on a different issue.

121    The evidence is to the following effect.

122    On 19 September 2016 at 11.00 am Mr Cross sent a letter to Mr Martin’s solicitors in the following terms:

Colleagues,

Your letter today refers to a letter that was purportedly sent to us on 15 September 2016.

We have not [sic] record of receiving that letter.

We contacted Ms Boyd by telephone on Friday 16 September 2016 and left two messages for her to call us so that we could discuss the arrangements for mediation referred to in our letter sent on 14 September 2016. We did not commence the Federal Court proceedings on Friday because we anticipated that Ms Boyd would return our call – but that did not happen. In the absence of any response from your firm we commenced steps to file the Federal Court proceedings. In light of the fact that we have not seen a potentially important letter from you, we have stopped the process of filing the documents in the Federal Court.

Please send the 15 September letter to us as a matter of urgency.

123    I have not been taken to the “letter of today” referred to in the opening line of this email.

124    Between 10.45 and 10.46 am Mr Cross emailed unsigned initiating documents in the prohibition proceeding to Ms Jenny Smith, an employee of NRFA. Between 10.52 am and 10.53 am Ms Smith emailed to herself the statement of claim and genuine steps statement, each of which were signed and dated by Mr Cross. Ms Smith also emailed to herself the originating application. It was dated on its final page but not signed and dated on the third page by any lawyer acting for NRFA.

125    The initiating documents in the prohibition proceeding were faxed by Ms Smith to the Registry at 11.03 am on 19 September 2016.

126    On 21 September 2016 at 4.52 pm, Mr Cross sent an email to Ms Smith. It stated:

Some developments have just happened which may mean that we don’t want to proceed with the filing the FC docs right now. There may be a mediation. So I will reconnect with you about it tomorrow. Thanks for your help.

127    At 4.53 pm that day, Ms Smith replied:

No trouble. I have just put the docs back on your desk. I may be in a little later tomorrow due to my 9.30 medical appointment, but I’ll be in all day after that.

128    On 23 September 2016 at 4.27 pm, Mr Cross sent an email to Mr Martin’s solicitor. It stated:

Michael

The process of filing the documents with the Federal Court had progressed too far on Monday to be reversed following receipt of your email and our subsequent agreement on mediation. The Court sent us sealed copies yesterday.

So it is best we go ahead with service as per the attached letter …

129    All of the documents served under the cover of the attached letter are signed by Mr Cross and dated 19 September 2016.

130    The originating application in the form lodged in the Court (and accepted for filing) bears a date on the final page of 19 September 2016, but no date or signature where required for execution by the party’s lawyer.

131    Mr Martin pointed to a number of incongruities arising from this evidence. First, he said that Mr Cross’s statement that NRFA had “stopped the process of filing” the documents in this Court was false, because Mr Cross had only minutes before emailed the documents to Ms Smith, and Ms Smith had then faxed the documents to the Registry, two of which bore Mr Cross’s signature.

132    Second, he said that the assertion in Mr Cross’s email of 23 September 2016 was false because, since the morning of 19 September 2016, NRFA had taken positive steps to ensure that the documents were accepted for filing.

133    Third, he said that the originating application, as sealed by the Court, did not bear Mr Cross’s signature and date, so demonstrating that Mr Cross had signed and dated that document after the Court’s seal had been applied.

134    NRFA did not adduce evidence to rebut the inferences Mr Martin asked the Court to draw.

135    Notwithstanding the absence of evidence from NRFA, I do not consider that there is sufficient colour to Mr Martin’s allegations to displace the privilege. In my view, whilst the emails of 19 September 2016 and 23 September 2016 contain positive representations of fact, I am not satisfied that the representations were accompanied by the state of mind Mr Martin alleges, namely, an intent to deceive him into compromising his rights or interests in any way.

136    In so concluding, I have had regard to the wider context in which the allegations are made to ascertain whether they suggest an obvious motive for Mr Cross to deceive Mr Martin in the manner alleged. The reality for Mr Martin was that if the private mediation was unsuccessful, he faced an immediate jurisdictional challenge to his general protections application. The challenge would occur whether the prohibition proceeding was filed before or after the mediation. It has not been shown that it was a condition of Mr Martin’s participation in the mediation that the prohibition proceeding not be filed. Considered together, those circumstances do not support the inference invited by Mr Martin as to a dishonest state of mind.

137    Mr Martin’s submission that Mr Cross caused the documents to be faxed to the Registry “in response to” his solicitor’s letter sent earlier that morning does not find sufficient support in the evidence before me.

138    Mr Cross’s email to Ms Smith of 21 September 2016 stating that the filing of the documents should not proceed further tends against an inference that Mr Cross was intent upon doing all that was necessary to have the documents accepted for filing before the mediation occurred. It tends against a finding that Mr Cross knew, as at that date, that all things necessary to have the documents accepted for filing had been done at that time. The response of Ms Smith suggests that she was in possession of the documents and would return them to Mr Cross until she heard further from him. That too suggests that Ms Smith (as a person apparently acting under the direction of Mr Cross) was not taking any further step to ensure that the Registry accepted the documents for filing.

139    Mr Martin did not adduce evidence to explain what caused the Registry to accept the documents for filing on the following day. The correspondence passing between the Registry and any representative of NRFA was not put before me.

140    The later application of Mr Cross’s signature to the originating application may amount to a “fraud on the justice” if it was intended to mislead a party (or the Court) as to when documents were lodged for filing or as to some other critical circumstance. However, the originating application already sealed by the Court bore the date 19 September 2016, as did the other documents lodged for filing on that day. Mr Martin was told that the documents had been lodged for filing on that date, although he was not aware of the timing. On the limited material before me I am not satisfied that there is a colourable case to the effect that Mr Cross applied his signature and date to the third page of the originating application with the particular intent of reinforcing or obscuring an earlier falsehood about whether NRFA had put a stop to the process of filing the documents.

141    In assessing the sufficiency of the evidence, I have borne in mind judicial statements to the effect that a full scale trial of the issues is unnecessary. However, it must be emphasised that it is a serious thing to override the privilege where it otherwise exists. Whilst something less than full proof of wrongdoing may suffice, the peculiar circumstance of this case is that the wrongdoing relied upon is the relevantly the same wrongdoing forming the subject matter to be tried.

142    The conclusions I have expressed at the interlocutory stage do not foreclose Mr Martin from agitating the issue at trial, at which stage s 125 of the Evidence Act 1995 (Cth) will apply. It may transpire that as evidence is adduced, a sufficient case will emerge to justify an order for the production of the documents. That will be a matter for the trial judge.

143    The question of whether the material in Parts 3 and 4 in fact falls within the principles stated in Kearney does not depend on judicial pronouncement. NRFA either has a right in law to claim privilege in the communications or it does not. If the communications in fact came into existence in furtherance of a fraud in the relevant sense, then NRFA has a present obligation to produce them to Mr Martin.

Evidence and conclusions concerning waiver

144    By his third affidavit, Mr Toemoe conceded that privilege in some communications had been waived because “differing redactions” had been made to some documents contained in Part 4 of the NRFA’s list.

145    I understand Mr Martin to assert that NRFA had waived privilege in documents by producing to him communications listed in Part 1 which he alleges. However, Mr Martin did not provide the Court with copies of the documents produced to him so as to enable the Court to carry out an assessment of whether confidentiality in any privileged communications had been lost.

146    Relatedly, Mr Martin submitted that NRFA had adopted a different approach to its privilege claims in response to the discovery order than it had in response to the notice to produce. That submission has not been made out on the facts either. As mentioned earlier, I have not been shown the documents that were provided to Mr Martin in response to the notice to produce and I am in no position to ascertain whether they are now the subject of an inconsistent privilege claim.

147    Without reference to the documents produced to Mr Martin I cannot ascertain whether NRFA has otherwise sought to deploy privilege in a manner that is unfair or otherwise irreconcilable with the maintenance of its claims, whether by selectively disclosing privileged communications or otherwise.

148    Mr Martin did not invite the Court to compare the communications contained in Part 3 with the redacted communications contained in Part 4 so as to detect unfair deployment of the privilege. In the absence of an express application and without the benefit of submissions, I will not undertake such an assessment.

149    In the circumstances, I will not make orders for the production of documents on the basis that there has been a waiver of privilege. In the absence of a specific application I have not undertaken my own review of the documents for the purpose of identifying inconsistency in NRFA’s privilege claims as between Parts 3 and 4 of its list. I emphasise what I have said about NRFA’s continuing obligations. Its review of the documents in Part 4 revealed that some limited and unintended disclosures had occurred. It does not appear that a similar review was conducted by comparing the material withheld from production under Part 3 with the material produced under Part 4. It would be prudent for that to be done, lest there be further unintended disclosures that are presently undetected, the late production of which may cause disruption at the trial stage.

Evidence and submissions concerning independence

150    Paragraph 27 of Mr Toemoe’s third affidavit refers to an affidavit of Mr Cross filed on 1 February 2017 in the prohibition proceeding. It states:

On 8 August 2016 I was instructed to act for the respondents (‘my clients’) named in the ‘General Protections Application Involving Dismissal’ lodged in the Fair Work Commission … by [Mr Martin].

151    I afford some weight to this evidence. Although Mr Cross does not expressly state that he was instructed to act in his professional capacity as a lawyer, the reference to the respondents as clients and the concept of being “instructed to act” support an inference that Mr Cross was indeed acting in the capacity as a lawyer and not merely as one partner acting as mere agent for other partners in the FWC proceeding in which all of them were members of the respondent firm.

152    As I understand Mr Martin’s submissions, what is controversial is not merely the capacity in which Mr Cross acted, but his degree of “independence” in fact, by which he meant the degree to which Mr Cross was capable of exercising professional detachment from the firm and from the factual subject matter of his claims. At the heart of his submissions is a proposition that privilege cannot attach to the communications passing between Mr Cross and the other partners of NRFA in connection with the FWC proceeding and the prohibition proceeding because, having regard to all of the circumstances, he was not capable of exercising professional detachment from the subject matter of the advice or litigation. These submissions raise both factual questions concerning the asserted lack of independence, and legal issues concerning the impact that any demonstrated lack of independence should have on the assessment of NRFA’s privilege claims. To the extent that they raise factual issues, the issues are not expressly addressed in the affidavits of Mr Toemoe nor in the verification affidavit of Mr Cash.

153    The matters said to have affected the independence of Mr Cross included:

(1)    Mr Cross was personally involved in events within NRFA which culminated in Mr Martin’s dismissal and so was a potential witness in the FWC proceeding. At that time, Mr Martin objected to Mr Cross assuming responsibility for a review of certain conduct alleged against him. Mr Martin complained that Mr Cross was not sufficiently independent of the subject matter of the review.

(2)    Mr Cross was a partner of NRFA and hence could not be regarded as independent of it. He could not, Mr Martin submitted, act in the capacity of a legal adviser for NRFA as a client. By virtue of his status as a partner of NRFA, he was, it was submitted, a party to the proceeding and so could not be independent of the party for whom he acted.

(3)    Mr Cross is the person against whom Mr Martin makes serious allegations of misconduct in this proceeding.

154    As to the first point, the involvement of Mr Cross in the underlying events forming the subject matter of the FWC proceeding (and the potential for him to be a witness) is a matter referred to in the initiating documents lodged by Mr Martin in the FWC. NRFA does not appear to dispute the contention that Mr Cross was nominated to conduct a review of issues bearing on Mr Martin’s removal from the firm.

155    As to the second point, it is not controversial that Mr Cross was (and remains) a member of NRFA as respondent to the FWC proceeding and applicant in the prohibition proceeding. In the ordinary course he would jointly share the firm’s liabilities arising in the course of, or as a result of, either proceeding, and he would personally share in the gains of a beneficial outcome.

156    The third point is undoubtedly correct in fact. However, Mr Cross has not at any time acted or purported to act as a lawyer for NRFA for the purpose of the conduct of this proceeding and NRFA has not made a claim for legal professional privilege on the basis Mr Cross has provided legal advice or legal services in relation to NRFA’s rights and liabilities in this proceeding in any event.

157    The following facts are admitted on the pleadings and, subject to one qualification, may be taken to be uncontested on the interlocutory application. These facts are admitted to have persisted at all material times:

(1)    The partners of NRFA (including Mr Cross) were duly qualified and admitted legal practitioners and holders of current practising certificates;

(2)    The partners of NRFA were carrying on business together in general partnership subject to the Partnership Act 1892 (NSW);

(3)    The partners included Mr David Cross, Mr Wayne Spanner, Mr Cameron Harvey, Mr Chris McLeod and Mr Dylan McKimmiee;

(4)    Between 8 November 2016 and 8 February 2017, Mr Cross was “instructed by” NRFA “to represent” the persons named as respondents to the FWC proceeding and to represent NRFA in the prohibition proceeding and, for that purpose, Mr Cross was acting as the instructor of counsel on NRFA’s behalf; and

(5)    Mr Cross was subject to the same professional obligations that apply to a legal practitioner engaged in legal practice under the Legal Profession Uniform Australian Solicitors Conduct Rules 2015 (Solicitor’s Conduct Rules).

158    By [25] of the further amended statement of claim, for the purposes of the FWC proceeding and the prohibition proceeding, Mr Cross was acting “as an agent, simpliciter, representing the Respondents as ‘solicitor-litigants-in-person’”. This allegation is admitted: defence, [25]. Read in isolation, this plea alleges that Mr Cross was instructed to represent NRFA in the two proceedings in his capacity as mere agent of the other partners, and so not in his professional capacity as a lawyer. However, in light of the pleading as a whole, I do not understand NRFA’s admission to the plea to mean that Mr Cross did not also act in the professional capacity as NRFA’s lawyer in connection with the two proceedings. The critical question is the capacity in which he was acting in respect of the particular communications in issue.

159    Mr Martin went so far as to submit that NRFA’s former senior counsel, Mr Muddle SC also lacked professional detachment such that communications passing between him and Mr Cross and other partners of NRFA could not attract privilege. That submission was based on the proposition that Mr Martin remained a partner of NRFA at a time when senior counsel provided advice to the partners in respect of his removal from the firm. His submission was to the effect that senior counsel could not give advice to the firm of which Mr Martin remained a member. Mr Martin also submitted more generally that senior counsel lacked independence in the FWC proceeding because it concerned subject matter in respect of which he had previously given advice.

160    These submissions must be firmly rejected. Those persons who were partners of NRFA at the time of the intra-partnership dispute with Mr Martin (also a partner) were entitled to obtain advice from counsel as to their respective rights and obligations. The proposition that it was improper for Mr Martin to have been excluded from that advice is as surprising as it is unsound. Even more unsound is the proposition that legal professional privilege could not attach to communications between the partners of NRFA (other than Mr Martin) and senior counsel for the dominant purpose of obtaining or providing legal advice or legal services in relation to actual or pending litigation arising out of Mr Martin’s removal. As a matter of principle, there is nothing preventing a legal practitioner from providing legal advice and services in relation to legal proceedings concerning events or transactions in which the practitioner has previously given legal advice.

161    The legal principles will now be considered in their application to Mr Cross.

Independence – the applicable principles

162    Mr Martin’s submissions proceeded on an assumption that a lack of professional detachment in a legal practitioner was sufficient to deprive the practitioner’s client of an entitlement to privilege in respect of the practitioners’ advice. Mr Martin invited the Court to read submissions made by counsel on his behalf before Wigney J on an interlocutory argument in the prohibition proceeding. The written submissions have been read, as has a transcript of oral submissions made before Wigney J on 13 February 2017, for the limited purpose of understanding the legal principles upon which Mr Martin relied. It is notable that in the proceedings before Wigney J, Mr Martin did not persist with a challenge to NRFA’s privilege over communications to which senior counsel is a party. He did not so narrow his challenge in argument before me. He seeks access to all of the communications, whether senior counsel is party to them or not.

163    Mr Martin relies on Rich v Harrington [2007] FCA 1987; (2007) 245 ALR 106. In that case, Branson J upheld a challenge to privilege claimed by a firm in respect of legal advice given by an in-house lawyer who was also a partner of the firm. There is, I accept, some support for Mr Martin’s position in the approach taken by Branson J in Rich.

164    Rich was applied in Aquila Coal Pty Ltd v Bowen Central Coal Pty Ltd [2013] QSC 82 at [10] (Boddice J). However, its correctness has been questioned by at least two members of this Court: Dye v Commonwealth Securities Ltd (No 5) [2010] FCA 950 (Katzmann J) at [11] – [19]; Archer Capital 4A Pty Ltd (as trustee for the Archer Capital Trust 4A (ACN 123 463 749)) v Sage Group PLC (No 2) (2013) 306 ALR 384 (Wigney J) [72] – [73]). The outcome of these cases did not turn on whether Branson J was correct in the approach that her Honour took, and none of the cases concern advice given by a legal practitioner who also had the status of a partner of his or her client.

165    As will become clear, my examination of the documents subject to NRFA’s claim for privilege reveals few documents in respect of which the claim for privilege depends wholly upon an analysis of the independence of Mr Cross (in his professional capacity as lawyer) viz a viz NRFA (in its capacity as client), if “independence” is to be conceptualised as having the role identified by Branson J in Rich. In respect of those documents, if the reasoning in Rich were to be applied, I would conclude that the nature of the relationship between Mr Cross and NRFA lacked the requisite independence such as to sustain NRFA’s privilege claims in them.

166    In the paragraphs that follow I explain why I have not applied the reasoning in Rich to those documents.

167    In Rich, the applicant (Ms Rich) commenced proceedings against the partners of a legal and accounting firm, Price Waterhouse Coopers (PwC). The central allegations in the action were acts of sex discrimination, bullying and harassment by a partner, having the subsequent approval of the board of partners and for which all partners were alleged to be liable.

168    Ms Rich challenged PwC’s claim of privilege in respect of certain communications in the nature of legal advice given by lawyers in PwC’s in-house Office of General Counsel (OGC) to PwC. Ms Rich submitted that the nature of the relationship between OGC and the partners of PwC was not such as to support the privilege claim. Among other things, the person holding the office of general counsel and having ultimate responsibility for the work of solicitors within the office, was himself a partner of PwC, as was another senior solicitor within the office. The subject matter of the proceeding involved allegations of a personal and serious nature against certain members of the firm with whom the solicitors were familiar, and had the potential to tarnish the reputation of the firm.

169    In concluding that PwC’s privilege claim could not be maintained, Branson J discerned agreement in the judgments of the members of the High Court in Waterford v Commonwealth (1987) 163 CLR 54 “as to the need in every case for the legal adviser to be ‘independent’” (at [36] – [38]). The rationale for that requirement, her Honour said, was that stated in the following passage of the judgment of Brennan J (at 70):

The purpose of legal professional privilege is to facilitate the seeking and giving of legal advice and thereby to ensure that the law be applied and litigation be properly conducted …  If the purpose of the privilege is to be fulfilled, the legal adviser must be competent and independent. Competent, in order that the legal advice be sound and the conduct of litigation be efficient; independent, in order that the personal loyalties, duties or interests of the adviser should not influence the legal advice which he gives or the fairness of his conduct of litigation on behalf of his client. If a legal adviser is incompetent to advise or to conduct litigation or if he is unable to be professionally detached in giving advice or in conducting litigation, there is an unacceptable risk that the purpose for which privilege is granted will be subverted.

(Citations omitted)

170    Branson J perceived majority support for the principles stated in the passage. Her Honour said (at [38]):

Although Brennan J expressed a narrower view than Mason and Wilson JJ on the question of when legal professional privilege attaches to confidential professional communications between government agencies and salaried legal officers, their Honours were in agreement as to the need in every case for the legal adviser to be ‘independent’ (see also Deane J at p 80). See also Alfred Crompton Amusement Machines Ltd v Customs and Excise Commissioners (No 2) [1972] 2 QB 102 per Lord Denning MR at 129.

171    Her Honour also found support in the following statement of Graham J in Seven Network Limited v News Limited [2005] FCA 1551; (2005) 225 ALR 672 at [15]:

In my opinion, an in-house lawyer will lack the requisite measure of independence if his advice is at risk of being compromised by virtue of the nature of his employment relationship with his employer. On the other hand, if the personal loyalties, duties and interests of the in-house lawyer do not influence the professional legal advice which he gives, the requirement for independence will be satisfied.

172    Graham J later repeated that view in Telstra Corporation Limited v Minister for Communications, Information Technology and the Arts (No 2) [2007] FCA 1445 at [35].

173    The content of the requirement that a legal adviser be independent, Branson J said, was informed by “notions of the absence of fear of favour” (at [40]). Her Honour continued:

  An independent legal adviser is one who can bring a disinterested mind to bear on the subject matter of the legal advice. In the words of Brennan J in Waterford, what is required is a legal adviser who is able to be ‘professionally detached’ in giving the advice.

174    For PwC it was submitted that the concept of independence was concerned to ensure that legal professional privilege did not extend to advice given by lawyers in anything other than their professional capacity as lawyers. Issues affecting independence, PwC submitted, were issues that were potentially relevant to an assessment of whether a communication was made for the dominant purpose of obtaining or giving legal advice, especially in circumstances where an in-house lawyer assumes dual roles involving the provision of both legal and commercial advice. Independence, PwC submitted “has to be determined having regard to whether or not the person in question was performing a legal function (rather than a commercial or management function) in making a communication or preparing a document”. PwC relied on the judgment of Tamberlin J in Seven Network Limited v News Limited [2005] FCA 142.

175    Branson J was not persuaded that Tamberlin J “intended to conflate the criteria for a claim of client legal privilege”. Her Honour said that the requirement of independence was an essential characteristic of the relationship between lawyer and client as distinct from the criteria that the communication be made for the dominant purpose of giving or obtaining legal advice or to aid in the conduct of litigation in reasonable prospect. The dominant purpose test, her Honour said, was concerned with the object and subject matter of the communication and not with the nature of the relationship between the parties to the communication (at [58]), she continued:

In reaching a decision as to whether the relationship between OGC and the respondents was such as to secure to OGC’s advice concerning Ms Rich’s allegations and claims an independent character, I am not required to speculate about how General Counsel, or other solicitors in OGC, in fact approached the giving of that advice (Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 per Gleeson CJ, McHugh, Gummow and Hayne JJ at [7]). It may be that General Counsel and each solicitor in OGC was fully conscious of, and capable of avoiding, the insidious influences of factors such as loyalty to individual partners and to the firm including its leadership, concern for the reputation of the firm and the reputations of individual partners in the firm and other like matters. The critical question is whether the relationship between OGC and the respondents with respect to Ms Rich’s allegations was one of professional detachment.

176    Her Honour concluded that Ms Rich’s allegations were “inherently likely to engage the personal loyalties and duties” of all partners of PwC (including, implicitly, the partner holding the office of OGC) with the result that “OGC was not in a position to give professionally detached advice to the respondents concerning allegations of the character of those made by Ms Rich”.

177    With respect, I do not consider the reasoning of Branson J to be in accordance with Waterford, or with the reasoning of Lord Denning MR in Alfred Crompton Amusement Machines Ltd v Customs and Excise Commissioners (No 2) [1972] 2 QB 102, from which her Honour drew additional support.

178    Crompton is a necessary starting point. In that case, Lord Denning MR (with whom Karminski and Orr LLJ agreed) said (at 129):

The law relating to discovery was developed by the Chancery Courts in the first half of the 19th century. At that time nearly all legal advisers were in independent practice on their own account. Nowadays it is very different. Many barristers and solicitors are employed as legal advisers, whole time, by a single employer. Sometimes the employer is a great commercial concern. At other times it is a government department or a local authority. It may even be the government itself, like the Treasury Solicitor and his staff. In every case these legal advisers do legal work for their employer and for no one else. They are paid, not by fees for each piece of work, but by a fixed annual salary. They are, no doubt, servants or agents of the employer ....  They are regarded by the law as in every respect in the same position as those who practise on their own account. The only difference is that they act for one client only, and not for several clients. They must uphold the same standards of honour and of etiquette. They are subject to the same duties to their client and to the court. They must respect the same confidences. They and their clients have the same privileges.

179    His Lordship went on to confirm that where an in-house lawyer performs work for his employer in some other capacity, communications made in that other capacity would not attract privilege. He went on to say (at 129):

Being a servant or agent too, he may be under more pressure from his client. So he must be careful to resist it. He must be as independent in the doing of right as any other legal adviser …  There is a safeguard against abuse …  If there is any doubt as to the propriety or validity of a claim for privilege, the master or the judge should without hesitation inspect the documents himself so as to see if the claim is well-founded, or not.

180    A majority of the High Court in Kearney adopted and applied Crompton as correct (see at 510 (Gibbs CJ), 521 – 522 (Wilson J), 530 – 531 (Dawson J)), although the outcome of the case turned on other issues. Gibbs CJ said that the advice of an in-house lawyer would only be privileged if the lawyer who gives it has been admitted to practice and, his Honour was inclined to think, remains subject to the duty to observe professional standards and the liability of professional discipline: at 510. His Honour noted that qualifications of that kind had not been the subject of argument.

181    In Waterford the issue was whether legal professional privilege could attach to legal advice provided by lawyers employed by the Crown in right of the Commonwealth to the Attorney-General and the Department of Treasury concerning litigation pending before an administrative tribunal. Mason and Wilson JJ referred to the passages in Crompton extracted above. Their Honours observed that that aspect of the Court of Appeal’s decision had not been challenged on appeal to the House of Lords and had been applied in Australia, Canada and Ireland. Their Honours continued (at 62):

In our opinion, given the safeguards to which reference is made in the various citations, there is no reason to place legal officers in government employment outside the bounds of legal professional privilege.

182    Among the safeguards identified in the authorities was the discretion of a judge to inspect the documents for him or herself to ascertain whether the claim is properly made and so guard against the potential for abuse.

183    Mason and Wilson JJ went on to say (at 62) that the relationship between in-house lawyer and his or her employer “must be a professional relationship which secures to the advice an independent character notwithstanding the employment”. The emphasis is mine.

184    Brennan J drew a distinction between salaried lawyers within government and salaried lawyers employed within non-government agencies. His Honour said that the former relationship would attract the privilege but the latter would not. The rationale for the distinction was that lawyers employed in the offices of government were given statutory security of tenure, so leaving them “completely professionally independent”, whereas non-government lawyers were subject to influences that naturally attended the relationship of employer and employee. In the passage upon which Branson J relied in Rich, extracted at [169] above, Brennan J conceptualised “independence” as a necessary feature of the lawyer-client relationship.

185    Subject to one reservation, Deane J confirmed that legal professional privilege could extend to the advice given within an organisation by a salaried legal adviser. The reservation was that it was unnecessary to determine what, if any qualification would apply so as to avoid the potential for abuse (at 81).

186    More categorically, Dawson J said (at 95 – 96):

Whilst there is something to be said for the distinction ... between independent and employed lawyers, it is not a statement of the position at common law and there is authority in this Court and elsewhere for the proposition that legal professional privilege may attach to communications passing between a salaried legal adviser and his employer, provided that the legal adviser is consulted in a professional capacity in relation to a professional matter and the communications are made in confidence and arise from the relationship of lawyer and client. For this reason the legal adviser must be qualified to practise law and, it seems, subject to the duty to observe professional standards and the liability to professional discipline.

187    In my respectful view, Branson J was incorrect to say that there was majority support for the view expressed by Brennan J in Waterford. There is, however, majority support for the proposition that matters affecting a lawyer’s professional detachment (which inherently include his or her loyalties to the client arising out of, for example, an employment relationship) will necessarily bear on the question of whether the lawyer is, with respect to the communication in issue, acting in his or her capacity as a lawyer as opposed to some other capacity. The capacity in which the adviser is acting necessarily informs the dominant purpose of the communication in which privilege is claimed. As has been said, that is an objective factual enquiry. It is not to be answered definitively by reference only to whether there exists a potential for abuse of the privilege, however strong that potential might be.

188    The proposition that a lack of professional detachment on the part of an adviser will deny the entitlement to privilege must be rejected for a more fundamental reason: the privilege is that of the client, not that of the lawyer. Carried to its logical conclusion, the criterion of independence, as conceptualised by Brennan J in Waterford and Branson J in Rich, could not be fulfilled in circumstances where the personal interest of the lawyer obviously conflicted with the interests of the client. A lack of independence of that kind may cause the lawyer’s advice to be partial, incomplete or wrong and subject the lawyer to disciplinary sanction. But it is difficult to comprehend why, for the purpose of the common law of privilege, the lack of independence should deprive the relationship as one of lawyer/client and even more difficult to comprehend why the client’s privilege in the communication constituting the advice should be lost.

189    There is, in the circumstances of a case such as the present, a heightened potential for abuse or misuse of the privilege. The potential arises out of the discrete legal relationships viz a viz Mr Cross and the other members of NRFA. Clearly, there is a partnership relationship between Mr Cross and the other members of the firm. He may have communications with the other partners in his capacity as a partner per se concerning the management and commercial affairs of the firm, which may include its commercial interests in the outcome of litigation. Communications made in that capacity do not attract privilege. Mr Cross has also been instructed to “act on behalf of the firm” in relation to two proceedings to the extent that he is instructed to act in his professional capacity as a lawyer, that gives rise to an agency relationship quite apart from the agency relationship inherent in the partnership itself. It is that relationship that gives rise to distinct obligations owed to the other partners of NRFA and to the FWC and to this Court. Mr Martin’s pleaded case expressly acknowledges that Mr Cross was subject to the legal and ethical obligations pertaining to all admitted legal practitioners when representing NRFA in each proceeding. He was subject to those obligations not because he was a mere agent of NRFA but because he represented NRFA in legal proceedings in his capacity as an admitted legal practitioner.

190    Generally speaking, the potential for abuse of the privilege arises because of the risk that the instruction to act is itself a sham arrangement and the risk that communications between a legal practitioner and client are made subject to privilege claims when, in truth, the communications have been made by the lawyer acting in some other capacity.

191    Risks of this kind appear to me to have been front of mind of the members of the High Court in Kearney and Waterford. The safeguards referred to in the judgments (and for which I consider there to be a majority view) are the requirement that the lawyer be admitted to practice and so subject to regulatory oversight, and the ability of the Court to inspect the documents for itself.

Inspection of the documents

192    Mr Martin submitted that the Court should not inspect the documents. As I understand the submissions, there are two reasons why he said the Court should not do so. The first is the obvious risk that the inspection of documents by a judge might give rise to an apprehension of bias and so create a circumstance in which the judge must be disqualified from presiding at the trial. The risk of disqualification may be afforded more weight when a claim for privilege is to be assessed in the course of a trial that is already underway. However, in Mr Martin’s case, the disqualification of a judge of the Court would not disrupt the trial, nor is it likely to affect the timetable set by Wigney J for the progression of Mr Martin’s claims to finalisation.

193    Second, Mr Martin submitted that NRFA had not established the facts necessary to establish its privilege claim, and a colourable case of fraud was demonstrated without reference to the documents in Parts 3 or 4 of NRFA’s list. Although not expressly stated, I infer from that submission that it should follow that NRFA should be ordered to produce to him all of the documents in which privilege was claimed, without the Court having regard to their content.

194    Katzman J dealt with a similar submission in Dye at [32]:

The respondent invited me to inspect the documents. Mr King did not dispute that it was permissible for me to examine the documents. See Grant v Downs at 689. He submitted, however, that the respondent had not discharged its onus of proof and for that reason I should decline to inspect them. Such an approach does not accord with judicial practice. Privilege is a fundamental common law right: Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49, 213 CLR 543 at [11], [44], [85], [132]. Consequently, an overly narrow or technical approach should not be taken: DSE (Holdings) Pty Ltd v InterTAN Inc [2003] FCA 1191, 135 FCR 151 (DSE (Holdings)) at [31]. It is well accepted that inferences may be drawn from the documents themselves.  …

195    I respectfully agree. As Stephen, Mason and Murphy JJ said in Grant v Downs at 689:

The court has power to examine the documents for itself, a power which has perhaps been exercised too sparingly in the past, springing possibly from a misplaced reluctance to go behind the formal claim of privilege. It should not be forgotten that in many instances the character of the documents the subject of the claim will illuminate the purpose for which they were brought into existence.

196    See also Esso at [52] (Gleeson CJ, Gaudron and Gummow JJ).

197    In the present case, inspection of the documents serves to illuminate the capacity in which Mr Cross made or received the communications to which he was a party and so assist in the Court’s assessment of their dominant purpose.

198    Although I have determined that Mr Martin has established no colourable case to establish that the communications were brought into existence in furtherance of a fraud (broadly defined), the documents have been inspected with a view to discerning whether their content puts a different complexion on the evidentiary materials to which I referred earlier in these reasons.

Inspection

199    The documents have been reviewed having regard to the principles stated earlier in these reasons, as well as to the authorities summarised by Lockhart J in Trade Practices Commission v Sterling (1979) 36 FLR 244 at 245 – 246.

200    My reasoning in relation to the documents cannot be made transparent without destroying the confidentiality residing in them.

201    I will state in the most general terms the principles I have applied, the observations I have made and the conclusions I have drawn.

202    The communications are either expressly stated to be confidential, or an obligation of confidentiality may otherwise be implied in all of the circumstances.

203    Where a document consists of a printout of an email string, consideration has been given in each instance to the dominant purpose for which the latest email communication in time came into existence, as informed by the earlier communications in the email string. It has been necessary and appropriate to have regard to the whole of the document in order to discern whether privilege attaches the communications evidenced by it.

204    Where a communication consists of an email with attachments, I have assessed the email together with the attachment as a single communication. The dominant purpose of the communication has been assessed by reference to both the content of the email message and the nature and content of the attachment. I have regarded attached documents as copies of the original and assessed the dominant purpose for which the copy has come into existence. In most instances, the purpose for the attachment coming into existence could only be discerned from the content of the email to which it was attached. In other instances, the purpose of the attached document coming into existence is patent on the face of the document itself.

205    The communications fairly relate to both the FWC proceeding and the prohibition proceeding. The two proceedings are inextricably linked in the sense that NRFA’s response to the FWC proceeding was to threaten and commence the prohibition proceeding.

206    Among the attachments to emails are blank documents of the kind complained of by Mr Martin. The blank items include document numbers 451, 452, 525, 542, 543 and 586. In my view, the inclusion of those attachments as separate items in the list of documents does not affect the propriety of the privilege claim in respect to the email communication. As I have said, each email with attachments has been regarded as a single communication. There is one example of an email attachment having meaningless content (document 476). I apply the same reasoning to that document.

207    In some instances, the subjective purpose of a communication or a class of communications is made express by its author. In such cases, I have concluded that the dominant purpose of the communication or class of communication coincides with the expressly stated purpose.

208    I have concluded that documents which pre-date the FWC proceeding are properly the claim of privilege irrespective of whether litigation was anticipated at the time that they came into existence. My assessment of the dominant purpose of those communications does not depend on a finding that Mr Cross was acting in the capacity of a legal adviser in connection with them.

209    A greater proportion of the documents have been assessed by reference to the capacity and involvement of senior counsel.

210    I have concluded that privilege attaches to communications to which senior counsel is a party, or which have come into existence for the purpose of their provision to senior counsel:

(1)    communications passing between Mr Cross and senior counsel for the dominant purpose of the partners of NRFA, through the agency of Mr Cross, giving instructions to and obtaining legal advice from senior counsel;

(2)    communications passing between senior counsel and Mr Cross for the purpose of senior counsel giving legal advice and assistance to NRFA;

(3)    communications passing between senior counsel and partners other than Mr Cross for the dominant purpose of giving legal advice; and

(4)    communications from partners of the firm other than Mr Cross seeking or responding to legal advice from senior counsel.

211    I have identified among the documents a continuum of communications of the kind to which Taylor LJ referred in Balabel specifically involving senior counsel who, I find, maintained involvement and oversight in the period to which the documents relate.

212    I have inferred that communications came into existence for the dominant purpose of collating information into a single document in aid of the legal proceedings and also for the purpose of obtaining the advice of senior counsel in respect of the document and the resolution of the proceedings more generally.

213    I have given separate consideration to documents to which senior counsel is not a party. Of those documents, I have concluded that privilege attaches to:

(1)    communications from Mr Cross to other partners in which Mr Cross conveys the advice of senior counsel;

(2)    communications from other partners to Mr Cross for the dominant purpose of obtaining advice and assistance from senior counsel;

(3)    communications coming into existence for the dominant purpose of litigation, including for the dominant purpose of preparing documents for use in the litigation. Included in this category are documents brought into existence to aid the resolution of legal proceedings other than by a contested trial;

(4)    communications in which copies of documents are provided to Mr Cross with a view to Mr Cross providing them to senior counsel for the purpose of obtaining advice and assistance in relation to the FWC proceeding; and

(5)    communications, not otherwise falling within the categories I have described, by which Mr Cross otherwise seeks or receives instructions and provides advice and assistance for the dominant purpose of conducting the FWC proceeding and the prohibition proceeding. These documents too, form a part of a continuum of communications of the kind referred to in Balabel.

214    With respect to the communications described in [213(5)] I have concluded that Mr Cross was acting in a professional capacity as a lawyer viz a viz the other partners of NRFA as client, having regard to the principles, evidence and admitted facts discussed elsewhere in these reasons. It is documents falling within that subparagraph that are affected by my rejection of the approach taken by Branson J in Rich.

215    My review of the documents does not alter my view that privilege in the documents contained in Part 3 or the redacted portions of Part 4 is not displaced in accordance with the principles explained in Kearney. I cannot give reasons for that conclusion without destroying the confidentiality on which the privilege depends. My conclusion must be understood in the limited interlocutory context in which these reasons for judgment are given and in the absence of other evidentiary materials that might ultimately bear on the same issues at trial.

216    It follows that I will not make an order in terms of [11] of the interlocutory application.

217    It also follows that the interlocutory application must be dismissed.

Associate:

Dated:    11 February 2019