FEDERAL COURT OF AUSTRALIA

JWR Productions Australia Pty Ltd v Duncan-Watt [2019] FCA 367

ORDERS

THE COURT ORDERS THAT:

1.    Unless an application for a stay is made by the applicants to the proceeding on or before 4pm on Tuesday, 19 March 2019, leave is granted to the respondent to inspect and uplift the documents identified in the list of privileged documents produced by the applicants pursuant to the Notice to Produce dated 5 March 2019.

2.    Any application for a stay pursuant to order 1 be supported by an affidavit and the requirement for an interlocutory application be dispensed with.

3.    The applicants are to pay the respondent’s costs of and incidental to the objection to the Notice to Produce dated 5 March 2019 as agreed or assessed.

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

REASONS FOR JUDGMENT

(Revised from Transcript)

PERRY J:

1.    INTRODUCTION

1    This matter is presently being heard by Thawley J, together with an action by the same applicants against Mr Neil Gooding in proceedings NSD 327 of 2017. I understand that the parties have closed their respective cases and are in the process of preparing final submissions. The respondent, Mr Thomas Duncan-Watt, and Mr Gooding are also co-plaintiffs with Matthew Henderson trading as Matthew Management in proceedings commenced in October 2016 against the applicants and other business entities connected with Mr Rockefeller in the United States Supreme Court of New York.

2    The issue before me arises in only one of the matters currently before Thawley J, being the proceeding against Mr Duncan-Watt, with respect to the claim by the first and second applicants, JWR Productions Australia Pty Ltd (JWR Productions) and Mr Rockefeller respectively, for infringement of copyright in certain photographs.  I am asked to resolve a disputed claim for legal professional privilege over two communications between Mr Rockefeller and a third party, Mr Dario Gardiman. Mr Rockefeller and JWR Productions object on the ground of legal professional privilege to production of the communications pursuant to a notice to produce issued by Mr Duncan-Watt. While Mr Duncan-Watt does not dispute that the documents may have been the subject of legal professional privilege when created, at least for the purposes of this application, he contends that any privilege was waived by implication by reason of the unrestricted disclosure of the communications to Mr Gardiman.

3    This matter came before me urgently in the afternoon on 14 March 2019 as duty judge because the applicants indicated that they may wish the Judge determining the claim of legal professional privilege to look at the communications for that purpose and therefore suggested that the application should not be determined by the trial judge.

4    For the reasons given below, I consider that any legal professional privilege in the communications has been impliedly waived.

2.    EVIDENCE

5    The applicants relied upon the affidavit of Ms Lynne Elizabeth Anne Lewis, solicitor, sworn 13 March 2019. Ms Lewis has acted for the applicants since on or around 10 November 2006, first as a partner of MinterEllison and subsequently as a partner of Bird & Bird.

6    In addition, a bundle of documents entitled “Documents re privilege claim” was received in evidence, together with a letter dated 21 December 2016 from Mr Gardiman to Mr Rockefeller which was attached to an email from Mr Gardiman to Mr Rockefeller bearing the same date, and is relied upon by Mr Rockefeller at trial to establish ownership of the copyright in the photographs.

7    Finally, a copy of the two communications in respect of which privilege was claimed was marked for identification and provided to me at the hearing to consider in determining the applicants’ objection to the notice to produce, but was not at that time provided to the respondent or his legal representatives.

3.    BACKGROUND

8    In summarising the background and otherwise making findings necessary to dispose of the limited issue before me, I emphasise that I have not made any findings as to the substantive issues in dispute between the parties.

9    Among other causes of action, the statement of claim alleges that:

(1)    Dario Gardiman, an Australian citizen, is the author of photographs depicting (among other things) Mr Duncan-Watt with puppets from the stage show “Thank You for Being a Friend”;

(2)    the photographs were made by Mr Gardiman pursuant to an agreement for valuable consideration with the applicants pursuant to which Mr Gardiman was to take photographs in a variety of compositional combinations of Mr Rockefeller, Mr Duncan-Watt, and/or the “Thank You for Being a Friend” puppets;

(3)    the applicants are the owner of the copyright in the photographs, particulars of which are the “Letter of confirmation of assignment from Dario Gardiman dated 21 December 2016”; and

(4)    the respondent has reproduced and communicated the photographs to the public on his website without the licence or authority of the applicants, thereby infringing their copyright.

10    Mr Rockefeller and Mr Duncan-Watt are the co-authors of a stage show, “Thank You for Being a Friend”, which is apparently a parody of the 1980s and 1990s American television sitcom, “The Golden Girls”.

11    In his defence, Mr Duncan-Watt pleads that he does not know and cannot admit the alleged agreement pursuant to which the photographs were taken, admits that the applicants are the owner of copyright in the photographs, and denies that the reproduction and communication of the photographs by him was without the licence or authority of the applicants. Rather, Mr Duncan-Watt alleges at [26] of his defence that:

a)    the Applicants provided an express license to the Respondent to reproduce and communicate the Photographs to the public; and

b)    the licence provided to the Respondent by the Applicant was irrevocable; or

c)    in the alternative, the licence provided to the Respondent by the Applicant was revoked on 20 December 2016.

12    The particulars of paragraph [26] of the defence are that the licence was oral and was provided in a conversation between Mr Rockefeller and Mr Duncan-Watt on or about January 2015. The particulars also refer to a letter from the applicants’ solicitors dated 20 December 2016.

13    The photographs in question were taken on 12 December 2014. Mr Rockefeller alleges that Mr Gardiman did not charge him for the photographs as he took them as a personal favour to him. Mr Rockefeller alleges that, on or about 2 December 2014, Mr Duncan-Watt agreed to pay $1000 for Mr Gardiman to take the photographs as they were for Mr Duncan-Watt’s press and website, as well as half of the related expenses and fees for the usage of the photographs. Mr Rockefeller also alleges that following the photoshoot, he had a conversation with Mr Duncan-Watt in which Mr Rockefeller said that Mr Duncan-Watt could use the photographs once he had paid his share. As Mr Duncan-Watt has not made these payments, Mr Rockefeller therefore alleges that Mr Duncan-Watt had no authorisation to publish the photographs on his website. Mr Rockefeller gave evidence at the trial that the alleged arrangement was made and was cross-examined to the effect that it was not, in the course of which it was put to him that his evidence was false. 

14    Mr Duncan-Watt, on the other hand, denies any arrangement to the effect alleged by Mr Rockefeller. He alleges instead that there was an express oral licence from Mr Rockefeller to Mr Duncan Watt to use the photographs on his website. Mr Duncan-Watt was also cross-examined and it was put to him that his evidence on the matter was untrue.

15    The photographer, Mr Gardiman, was not called.

16    On 5 March 2019, the respondent issued a Notice to Produce to the applicants seeking communications relevantly between Mr Rockefeller and Mr Gardiman between November 2014 and December 2016 in respect of the photographs taken of either Mr Duncan-Watt or Mr Rockefeller on or about 12 December 2014. On 6 March 2019, the applicants produced certain documents in answer to the notice including a sealed envelope containing the two documents over which the applicants claim legal professional privilege. The two documents are described in Ms Lewis’ affidavit as follows:

17    With respect to the claim for legal professional privilege, Ms Lewis deposed that:

9. On 21 September 2016, Mr Keegan sent an email to Mr Rockefeller containing legal advice in relation to prospective litigation. I have a copy of that advice. I have taken instructions. The communications contained in Document 1 of the list of privileged documents contains communications passing between one of my clients and a third party made with reference to anticipated litigation for the purpose of being put before my clients’ then solicitor with the object of obtaining advice or enabling them to prosecute their action.

10. I refer to Document 2 of the list of privileged documents. I recognise the second page of Document 2 because I remember typing the contents of that document and I recognise the format of that document as being the template of MinterEllison with the firm’s address at the footer. The communications contained in Document 2 of the list of privileged documents contain:

(a) communications or documents provided by me to my clients on or around 13 December 2016; and

(b) communications passing between one of my clients and a third party made with reference to anticipated litigation and at my request or suggestion.

18    Mr Keegan is a solicitor who, with his firm, was retained to advise the applicants in relation to contemplated litigation now the subject of this proceeding,

19    The applicants submit that the grounds on which Ms Lewis identifies the first document as subject to legal professional privilege equate to one of the categories of privileged communications identified by Lockhart J in Trade Practices Commission v Sterling (1978) 36 FLR 244 (Sterling) at 246, namely, a communication passing between the party and a third person made with reference to litigation either anticipated or commenced, and, while not made at the request or suggestion of the party’s solicitor, is made for the purpose of being put before the solicitor with the object of obtaining her or his advice or enabling her or him to prosecute or defend an action. They submitted that the second document fell within two other categories also identified by Lockhart J, namely:

(1)    a communication of the kind already referred to but which is made at the request or suggestion of the party’s solicitor (ibid); and

(2)    “[a]ny communication between a party and his professional legal adviser if it is confidential and made to or by the professional adviser in his professional capacity and with a view to obtaining or giving legal advice or assistance; notwithstanding that the communication is made through agents of the party and the solicitor or the agent of either of them” (Sterling at 245).

20    The respondent contests the applicants’ claim to privilege, identifying as the primary ground of challenge that the allegedly unrestricted communications to Mr Gardiman, a non-party, are inconsistent with the maintenance of the privilege.

4.    RELEVANT PRINCIPLES

21    The onus lies upon the respondent, as the party asserting waiver of legal professional privilege, to establish that the conduct of Mr Rockefeller resulted in the implied waiver of the privilege: Cantor v Audi Australia Pty Ltd [2016] FCA 1391 (Cantor) at [81] (Bromwich J).

22    The respondent relies upon the statement of relevant principles by Griffiths J in College of Law Limited v Australian National University [2013] FCA 492 at [24] (cited e.g. with approval by Griffith J in Domino’s Pizza Enterprises Limited v Precision Tracking Pty Ltd (No 3) [2017] FCA 1063 at [10]). Drawing upon the authorities including Mann v Carnell (1999) 201 CLR 1 (Carnell); Bennett v Chief Executive Officer, Australian Customs Service (2004) 140 FCR 101; AWB Limited v Cole (No 5) (2006) 155 FCR 30; Osland v Secretary, Department of Justice (2008) 234 CLR 275; British American Tobacco Australia Ltd v Secretary, Department of Health and Ageing (2011) 195 FCR 123 and Cooper v Hobbs [2013] NSWCA 70, Griffiths J conveniently summarised the principles as follows:

24.    These authorities also establish the following relevant principles concerning implied waiver of privilege (noting that it is common ground here that the common law principles apply at this stage of the proceedings and not Part 3.10 of the Evidence Act 1995 (Cth)):

(a)    privilege will be waived where the conduct of the person claiming it is inconsistent with the maintenance of the confidentiality in the relevant communication which the privilege is intended to protect;

(b)    the test for implied waiver is objective, thus where such inconsistency is found, privilege will be waived regardless of the subjective intention of the party claiming the privilege;

(c)    whether there is inconsistency is to be determined in the context and circumstances of the case and in the light of any considerations of fairness arising from that context and those circumstances;

(d)    the question of implied waivers raise matters of fact and degree;

(e)    disclosure of the gist, conclusion, substance or effect of a privileged communication does not necessarily effect a waiver of legal professional privilege in respect of the advice as a whole. Whether it does or not in a particular case depends on whether, in the circumstances of that case, the requisite inconsistency exists between the disclosure on the one hand and the maintenance of confidentiality on the other;

(f)    the context includes such matters as the nature of the matter in respect of which the advice was received, the evident purpose of the person making the disclosure, and the legal and practical consequences of limited, rather than complete, disclosure; and

(g)    where the party claiming privilege has disclosed or deployed the relevant information in order to achieve some forensic or other advantage for itself, or to disadvantage another person in a similar way, this may amount to conduct which is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. Accordingly, the purpose for which the partial disclosure was made is important.

(See also the detailed and helpful discussion of the authorities by Bromwich J in Cantor at [75]-[99].)

23    Importantly in this regard, as the respondent submits, considerations of fairness do not feature in the assessment of whether privilege has been waived save insofar as they may bear upon the existence of the inconsistency between the client’s conduct and maintenance of the confidentiality of the advice. As the plurality held in Carnell:

29. Disputes as to implied waver 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.

(emphasis added; citations omitted)

5.    HAS LEGAL PROFESSIONAL PRIVILEGE IN THE COMMUNICATIONS BEEN LOST?

24    The respondent seeks production of the allegedly privileged communications from Mr Rockefeller in the context of a case put by the respondent explained by senior counsel for the respondent in the following terms:

The dispute broke out in 2016 and the proceedings in New York commenced in September 2016. Mr Rockefeller, on our case, then went looking around for weapons that he could throw at Mr Duncan-Watt in Australia, and he decided that these photographs – or the copyright in them, we say – was one of the ways that he could launch a counterattack. What is not controversial is that he got back in touch at that stage with a photographer, Mr Gardiman, to try to bring in the copyright. No doubt with a view to then enforcing that copyright against Mr Duncan-Watt …

25    In relation to this aspect of the respondent’s case, the respondent referred first to the email exchange between Mr Rockefeller and Mr Gardiman in which Mr Gardiman sent Mr Rockefeller the letter of 21 December 2016 “confirming” the assignment of copyright in the photographs to Mr Rockefeller. Secondly, the respondent referred to his cross-examination of Mr Rockefeller about the letter in the course of which Mr Rockefeller gave evidence that:

(1)    he got back in touch with Mr Gardiman in the closing days of 2016 by phone first;

(2)    he followed up the phone conversation with an email entitled “Usage of Golden Girls photography”;

(3)    Mr Gardiman had prepared the first draft;

(4)    this led to a new draft being prepared by a lawyer acting for Mr Rockefeller at MinterEllison which was sent by Mr Rockefeller to Mr Gardiman under cover of an email titled “Usage of Golden Girls photography”; and

(5)    Mr Gardiman then “tweaked it”, put it on his letterhead, signed it, and returned it.

26    At the end of that line of cross examination, Mr Rockefeller denied the proposition put to him that “what we see you doing here in this letter is arming yourself for the coming conflict with Mr Duncan-Watt – isn’t it – by fixing up arrangements for these photographs so that you can use them against him?”

27    Accepting, therefore, as I have said that the communications were subject to legal professional privilege when they were created and based upon the information available to the respondent at the time of the application for production, the respondent then submitted that there was nothing to suggest that Mr Rockefeller conveyed to Mr Gardiman that the communications were subject to legal professional privilege or were otherwise confidential. As such, the respondent submits that there was nothing to suggest that Mr Gardiman would not have been free to disclose the communications, for example, to his own lawyers, Mr Duncan-Watt, or anyone else. It follows, the respondent submits, that the maintenance of legal professional privilege in the communications is inconsistent with the freedom available to Mr Gardiman to do as he wishes with them.

28    As against this, the applicants submitted that in order to determine whether an implied obligation of confidence was conveyed, it is necessary to look at the text of the communications in question, bearing in mind that the author and recipient are lay people. In this regard, the applicants submitted that references in communications between lay people referring to lawyers can give rise to an implied obligation of confidence between them as it indicates that there is a dispute about which one of the parties is taking legal advice.

29    However, with the benefit of having read the correspondence in respect of which privilege is claimed, there is nothing that alerts Mr Gardiman to the existence of any dispute or pending litigation, and the mere reference to “lawyers” in Mr Rockefeller’s email to Mr Gardiman falls well short in my view of suggesting that the communications were subject to legal professional privilege or that it was otherwise asserted that they should be kept confidential. There is no other feature of the communications that suggests that Mr Rockefeller wished them to remain confidential. It follows that the respondent rightly submits that no restriction was imposed upon Mr Gardiman as the recipient of the allegedly privileged emails with respect to further disclosure of the communications and as such he was at liberty to show these to the respondent or anyone else. Accordingly, the respondent’s submission that there is an inconsistency between Mr Rockefeller’s conduct and the maintenance of legal professional privilege over the communications should be upheld. By contrast, for example, in Carnell, the critical feature which denied that a waiver should be imputed was that the documents in question were shown to another member of the Legislative Assembly, Mr Moore, by way of a confidential briefing only by the Chief Minister of the Australian Capital Territory and, as such, Mr Moore was not at liberty to show the documents to Mr Mann or anyone else: Cantor at [87].

30    The respondent also submits that the inconsistency is further informed by the unfairness in permitting Mr Rockefeller to rely upon that part of the document which Mr Gardiman was apparently prepared to sign, without the respondent knowing what Mr Gardiman was not prepared to sign, referring to Mr Rockefeller’s evidence that Mr Gardiman had “tweaked it”. Importantly in this regard, the respondent also submitted that the purpose of communicating the draft letter to Mr Gardiman was not merely to gather information from him but to “gather in the legal right”. As to the latter, the respondent submitted that under s 35 of the Copyright Act 1968 (Cth) (Copyright Act) the photographer is the first owner of the copyright absent a contrary arrangement being made and that the first time that an assignment was made in writing from Mr Gardiman to Mr Rockefeller was the letter of 21 December 2016.

31    The applicants accepted that only the owner of the copyright can make a claim for infringement and that an exclusive licence must be in writing. However, counsel for the applicants submitted that the alleged inconsistency between maintenance of the privilege and the disclosure to Mr Gardiman depends on a distinction that is essentially illusory in nature, namely, the gathering of evidence, on the one hand, and the gathering in of the copyright, on the other hand. In their submission, there is no difficulty in a party who wishes to assert a claim for copyright ensuring before bringing the claim that it is in order and enforceable – that is, that they have “all of their ducks in a row”, as counsel described it – and the notion of confirmatory documents as between an original author and a related party is unexceptional. Furthermore, the applicants submitted that from a strictly legal perspective, an individual can have an equitable interest which is transformed upon the assignment being put in writing into a legal interest enforceable under the Copyright Act.

32    In my view, that submission must be rejected. As the respondent submits, the request made by Mr Rockefeller to Mr Gardiman was effectively a request to make Mr Rockefeller the legal owner of the copyright, given that only an assignment in writing has effect under s 196 of the Copyright Act. That being so, the communications from Mr Rockefeller to Mr Gardiman were not made merely for the purpose of obtaining legal advice or enabling the applicants to prosecute an action against the respondent, but to “gather in the right”, as the respondent submitted. This gives rise to a relevant unfairness about the genesis of the written assignment on which the applicants rely as it would otherwise be known only to the applicants and this unfairness informs the inconsistency between the applicants’ conduct and maintenance of the privilege.

33    Finally, the applicants submitted that unfairness in this context must be measured having regard to all of the circumstances. In the applicants’ submission, given that ownership of the copyright has been admitted from the outset, the correspondence has no apparent relevance and therefore there is no unfairness in maintaining legal professional privilege over the communications. In my view however this is not the kind of unfairness which may inform the question of whether or not there has been a waiver of the privilege. Rather, as senior counsel for the respondent submitted and the authorities earlier referred to make clear, the determinative question is whether there is an inconsistency between Mr Rockefeller’s conduct and maintaining the privilege in the communications. Unfairness can be relevant only to ascertaining whether such an inconsistency exists, and is not at large.

34    Further and in any event, I accept the respondent’s submission that the communications are potentially relevant to the case on which Mr Duncan-Watt opened at trial and upon which he cross-examined Mr Rockefeller, insofar as Mr Duncan-Watt contends that the bringing of these proceedings is collateral to the New York proceedings and seeks to challenge the applicants’ motivations in pursuing the litigation (see above at [24]).

6.    CONCLUSION

35    As I have found that privilege did not attach to the communications identified in the list of privileged documents produced by the applicants pursuant to the Notice to Produce dated 5 March 2019, and identified as MFI-A2 on this application, the application by the respondent to access the privileged communications must be allowed with costs.

Associate:

Dated:    19 March 2019