FEDERAL COURT OF AUSTRALIA

Martin v Norton Rose Fulbright Australia [2019] FCA 1101

ORDERS

THE COURT ORDERS THAT:

1.    The Applicant is granted leave to appeal with respect to Grounds 5, 6 and 7 contained in the draft Notice of Appeal attached to the Application for Leave to Appeal filed on 25 February 2019.

2.    The Applicant is refused leave to appeal with respect to Grounds 1 to 4 inclusive and with respect to Ground 8.

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

REASONS FOR JUDGMENT

WHITE J:

1    On 11 February 2019, Charlesworth J dismissed an interlocutory application of the applicant (Mr Martin) which concerned, principally, issues of discovery: Martin v Norton Rose Fulbright Australia (No 2) [2019] FCA 96. Mr Martin now seeks leave to appeal against that judgment.

Matters of background

2    In the underlying proceedings, Mr Martin seeks damages from the firm of Norton Rose Fulbright Australia (NRFA), following the termination of his staff partnership in that firm on 15 July 2016. There is an issue as to the correct characterisation of Mr Martin’s relationship with NRFA, and I am using the term “partnership” and its cognates for convenience only and without intending any pre-judgment of that issue.

3    None of Mr Martin’s claims concern the actual termination of his staff partnership. Instead, they arise out of steps taken subsequent to that termination. Those steps, as alleged by Mr Martin, were:

(a)    on 5 August 2016, Mr Martin commenced in the Fair Work Commission (the FWC) a General Protections Application under Pt 3-1 of the Fair Work Act 2009 (Cth) (the FW Act) seeking relief in respect of the termination. The respondents to that application were NRFA and four of its partners. A conciliation conference in those proceedings was listed before the FWC on 20 September 2016;

(b)    between 26 August 2016 and 19 September 2016, Mr Martin, by his then solicitors, Harmers, and NRFA engaged in discussions about participation in a private mediation;

(c)    on 21 September 2016, NRFA commenced proceedings in this Court under s 39B of the Judiciary Act 1903 (Cth) (NSD1610/2016) seeking an order prohibiting the FWC from proceeding with Mr Martin’s General Protections Application, on the basis that it lacked jurisdiction to do so. NRFA had sent the Originating Application, Statement of Claim and a Genuine Steps Statement to the Court on 19 September 2016 at 10.59 am, but they were not accepted for filing until 21 September 2016;

(d)    on 19 September 2016, the FWC, at the request of the parties, adjourned the listed conciliation conference to 19 October 2016;

(e)    the proceedings in NSD1610/2016 were served on Harmers on 23 September 2016;

(f)    on 7 October 2016, the parties participated in a private mediation, but did not reach a concluded settlement;

(g)    on 17 October 2016, Mr Martin discontinued his General Protections Application in the FWC; and

(h)    on 18 October 2016, at the First Case Management Hearing in NSD1610/2016, NRFA sought an order that Mr Martin pay the costs of those proceedings.

4    Mr Martin’s claims, summarised at a high level of generality, are as follows. He seeks damages in respect of an alleged contravention of s 18 of the Australian Consumer Law (the ACL). Mr Martin alleges that statements and conduct by members of NRFA in relation to the negotiation of the agreement for the private mediation were misleading or deceptive, were made in order to induce him to continue the negotiation of terms for the private mediation, and were made to provide a basis on which NRFA could “force the adjournment” of the conciliation conference in the FWC. He also alleges that representations made by NRFA when serving the proceedings in NSD1610/2016 were false or misleading.

5    Mr Martin also seeks damages for the alleged deceit by NRFA constituted by the same conduct on which he relies for the s 18 claim.

6    Mr Martin alleges that the conduct of NRFA in commencing NSD1610/2016 constituted an intentional abuse of this Court’s process because it was commenced for the purpose of causing him vexation and harassment, to obstruct, hinder and frustrate his FWC application as well as for other inappropriate purposes and not for the predominant purpose of obtaining relief to which NRFA may be entitled. Further, Mr Martin alleges that the action of NRFA in making the costs application in NSD1610/2016 was vexatious and an abuse of this Court’s process.

7    Mr Martin alleges that, by reason of the alleged misleading or deceptive conduct and the alleged deceit, he discontinued the General Protections Application, and incurred costs and a potential liability for the costs of NRFA in Action NSD1610/2016, as well as other detriments. Several of Mr Martin’s allegations concern the conduct of Mr David Cross, a partner in NRFA. Mr Martin alleges, and NRFA admits, that between 8 August 2016 and 8 February 2017, Mr Cross was instructed to represent the respondents in his FWC action and to represent NRFA in Action NSD1610/2016.

8    Mr Martin’s proceedings were initially allocated to the docket of Wigney J. On 21 June 2018, Wigney J made orders (as I understand by consent) that NRFA discover 13 categories of documents. On 2 August 2018, the firm of Maddocks (which was then acting for NRFA) served a list of the documents on Mr Martin’s then lawyers, Bourne Lawyers. The list was verified by Mr Cash, a partner in the Melbourne office of NRFA, and listed some 687 documents. A claim for privilege was made in respect of 268 documents (in whole or in part).

The interlocutory application

9    Mr Martin was dissatisfied with that list and with other matters. On 19 October 2018, he filed an interlocutory application seeking 16 separate orders. Wigney J had previously directed that, if Mr Martin did file such an application, it would be heard on 6 December 2018.

10    Mr Martin’s application was supported by an affidavit made by his then solicitor, Mr Bourne, on 19 October 2018. Mr Toemoe, a member of the firm of King & Wood Mallesons (KWM) (which commenced acting for NRFA on 10 October 2018) made an affidavit in response of 2 November 2018.

11    In late November 2018, the proceedings were reallocated from the docket of Wigney J to the docket of Charlesworth J. Her Honour maintained the hearing date of 6 December 2018 although making orders on 3 December 2018 adjusting the hearing commencement time.

12    At 10.04 pm on 5 December 2018, KWM lodged for filing in the Court, using the Court’s electronic filing system, two further affidavits from Mr Toemoe both made on 5 December 2018. The first, with annexures, comprised 124 pages. The second, with annexures, comprised 118 pages.

13    Rule 29.08 of the Federal Court Rules 2011 (Cth) (the FCR) requires a party intending to use an affidavit to serve it on each other interested party at least three days before the occasion for using it arises. It seems that no one adverted to this Rule on 6 December 2018. In particular, counsel for NRFA did not seek any abridgment of the time fixed by r 29.08 so as to allow NRFA to rely on the affidavits at the hearing.

14    Paragraphs [1] to [13] of Mr Martin’s interlocutory application concerned issues of discovery.

15    Mr Martin did not pursue [14] of the application and Charlesworth J refused to make the order sought in [15] by which Mr Martin sought leave to amend two paragraphs in his Further Amended Statement of Claim. Her Honour refused the grant of leave because Mr Martin had not formulated the amendments for which he sought leave. Mr Martin does not seek leave to appeal with respect to that refusal.

16    In [16] of the interlocutory application, Mr Martin sought the recusal of Wigney J. That application fell away by reason of the reallocation of the matter, for independent reasons, to the docket of Charlesworth J.

17    The hearing of Mr Martin’s interlocutory application occupied the whole of 6 December and part of 7 December 2018. Mr Martin was represented by counsel on the morning of 6 December 2018 but thereafter represented himself. Her Honour dismissed the claim in [1] to [3] of the Interlocutory Application for reasons given during the course of the hearing, and dismissed the remaining applications in the judgment delivered on 11 February 2019.

18    Although the draft Notice of Appeal states that Mr Martin seeks leave to appeal against the whole of the judgment, the grounds indicate that he wishes to appeal only against that part of the judgment which concerned his complaints about NRFA’s discovery.

Principles and approach

19    The principles to which the Court has regard on applications for leave to appeal against interlocutory judgments are well established. First, it is established that appellate review of discretionary judgments of the kind involved presently is limited. The principles stated in House v The King [1936] HCA 40; (1936) 55 CLR 499 at 505 apply:

It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so.

20    With the exception of two matters to which I will return, the draft Notice of Appeal does not contend that the primary Judge misunderstood the principles to be applied.

21    In addition, appellate courts exercise restraint before interfering with judgments concerning matters of practice and procedure. The High Court referred to this restraint in Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170 at 177:

Nor is there any serious dispute between the parties that appellate courts exercise particular caution on reviewing decisions pertaining to practice and procedure. Counsel for Brown urged that specific cumulative bars operate to guide appellate courts in the discharge of that task. Not only must there be error of principle, but the decision appealed from must work a substantial injustice to one of the parties. The opposing view is that such criteria are to be expressed disjunctively. … For ourselves, we believe it to be unnecessary and indeed unwise to lay down rigid and exhaustive criteria. The circumstance of different cases are infinitely various. We would merely repeat, with approval, the oft-cited statement of Sir Frederick Jordan in In re the Will of F.B. Gilbert (dec) (1946) 46 SR (NSW) 318, at p 323:

“… I am of the opinion that, …. there is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the order of Judges of first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long pursue or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal.”

(Citations omitted)

22    Section 24(1A) of the Federal Court of Australia Act 1976 (Cth) (the FCA Act), which imposes the requirement for the grant of leave in the present instance, reflects the restraint to which the High Court referred in Adam P Brown.

23    Although the discretion to grant leave to appeal conferred by s 24(1A) is in terms unfettered, the approach to its exercise taken by the Full Court in Décor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 844; (1991) 33 FCR 397 has been influential. The approach applied by the Full Court (Sheppard, Burchett and Heerey JJ) was to enquire, first, whether in all the circumstances, the judgment of the primary Judge was attended by sufficient doubt to warrant it being reconsidered by the Full Court and, secondly, whether substantial injustice would result if leave were refused, supposing the decision to be wrong. That approach is not to be applied in a rigid way, having regard to the variety of the forms of interlocutory decisions which may be made. The Full Court in Samsung Electronics Co. Ltd v Apple Inc. [2013] FCAFC 138 at [19] spoke of the need for flexibility as follows:

The very width of the discretion and the prudence in not seeking to confine the manner in which it is to be exercised is a necessary corollary of the myriad of interlocutory decisions which may be made – ranging from interlocutory decisions affecting the substantive rights of parties (and effectively being final orders) to matters of practice and procedure (including decisions to extend time, the granting or refusal of adjournments and the filing of evidence).  The different character of interlocutory decisions which may be made and the different factual and forensic circumstances in play when such decisions are made nevertheless have occasioned a different emphasis from one judgment to another upon one particular factor or factors rather than others.

24    These are the principles which I consider appropriate to be applied in the present case.

The course of the application for leave to appeal

25    Mr Martin has represented himself on the application for leave to appeal.

26    At a case management hearing on 17 April 2019, the Court listed the application for hearing at 2.15 pm on 23 May 2019 and made timetabling orders with respect to that hearing. These included Mr Martin providing an application book and an outline of submissions.

27    Mr Martin did not comply with either order. NRFA provided an application book and an outline of submissions.

28    At the hearing on 23 May 2019, Mr Martin made, without notice, an oral application for the Court to make orders pursuant to r 1.21 of the FCR with respect to an action he proposed commencing in the Court. That application was refused, but the time taken dealing with it meant that the hearing on the application for leave to appeal could not be completed on 23 May 2019. The hearing was then adjourned to the following day at 9.30 am.

29    Mr Martin did not attend that hearing. He sent an email to the Court stating that he was unwell. The Court then adjourned the hearing to Monday, 27 May 2019 at 2.15 pm.

30    Mr Martin sent an email to the Court indicating that he would not be able to attend that hearing by reason of ill health (with an attached medical certificate) and stated that his wife had gone into labour. The Court then ordered that any further submissions which Mr Martin wished to make in support of his application for leave to appeal were to be made in writing and filed and served by 3 June 2019, that any further submissions which NRFA wished to make were to be filed and served by 7 June 2019, and stated that it would then determine the application for leave to appeal on the papers. The Court granted the parties liberty to apply with respect to those orders but indicated that, if that liberty was to be exercised, it was to be done by the filing and service of an interlocutory application supported by an affidavit.

31    Mr Martin has not filed and served any written submissions since 27 May 2019. Nor has he exercised the liberty to apply granted by the orders on 27 May 2019. NRFA provided further submissions on 7 June 2019.

32    By an email of 31 May 2019, Mr Martin indicated that he sought an extension of the times fixed by the orders made 27 May 2019. He was reminded that the liberty to apply was to be exercised by the filing of an interlocutory application and supporting affidavit. Although Mr Martin has indicated from time to time that he would file such an application, he has not done so. Just on seven weeks have now lapsed since 27 May 2019.

The grounds of appeal

33    The draft Notice of Appeal contains eight, but effectively, seven grounds. Ground 1 is not a proper ground as it asserts no more than that the primary Judge erred by dismissing Mr Martin’s Interlocutory Application of 19 October 2018. Ground 2 alleges that the Judge denied Mr Martin procedural fairness and contains eight particulars of that allegation. Ground 3 alleges an error by the Judge in failing to order Mr Cash to make a further affidavit deposing to particular steps he had taken before making the affidavit of discovery of 2 August 2018. Grounds 4 to 8 allege errors by the Judge in her decision concerning NRFA’s claim of legal professional privilege.

Ground 2: Denial of procedural fairness

34    The draft Notice of Appeal alleges that the primary Judge failed to provide procedural fairness to Mr Martin in eight respects.

The refusal of adjournment applications

35    Mr Martin referred to the refusals by the primary Judge of adjournments, being those to which her Honour referred in [42] and [98] of the reasons.

36    In [42], the primary Judge said that she had refused Mr Martin an adjournment so as to allow him to consider whether Mr Cash and Mr Toemoe should be required to attend for cross-examination. In [98], the primary Judge referred to her refusal of an adjournment so as to give Mr Martin time to consider whether to require Mr Toemoe to attend for cross-examination.

37    As Mr Martin and his then legal advisors had had the affidavit of Mr Cash since 2 August 2018, it understandable that the primary Judge refused an adjournment for the purpose of giving Mr Martin time to consider whether he should be required to attend for cross-examination. Mr Martin had already had ample time in which to consider that matter.

38    In the case of Mr Toemoe, the late filing of the application meant that, strictly speaking, the issue should not have arisen without an application by NRFA for an abridgment of the time fixed by r 29.08 of the FCR for the filing of those affidavits. Despite that, Mr Martin has not shown that a grant of leave is appropriate with respect to the refusal of the adjournments concerning Mr Toemoe’s affidavits. First, the decision on the adjournment application was discretionary and hence attracts the principles to which reference was made earlier. Secondly, Mr Martin has not established an arguable case of denial of procedural fairness. Even if he did, he would have difficulty in showing that the denial had had any material consequence. That is because the primary Judge made it plain that she had “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”, at [99].

39    No basis for a grant of leave in respect of the refusal of the adjournments has been established.

Actual or apparent bias

40    Next, Mr Martin alleges that the primary Judge demonstrated actual or apparent bias in favour of NRFA by deprecating his decision to terminate legal representation part way through the hearing and by failing to afford him “the same rights, privileges and audience” enjoyed by NRFA. Mr Martin has not made any submissions in support of a grant of leave on this ground. Nor did he make any submissions with respect to bias before the primary Judge. My perusal of the transcript of the hearing before the primary Judge does not indicate any basis upon which a reasonable argument that the Judge demonstrated actual or apparent bias could be made.

41    Leave to appeal with respect to this complaint is refused.

A miscellany of complaint

42    It is not necessary to consider separately Mr Martin’s remaining complaints made with respect to his claim of a denial of procedural fairness. These were of a diverse and generally unparticularised kind. By way of example, Mr Martin alleges that the primary Judge failed to take proper account of his submissions regarding his lack of independent counsel or other representation in the proceeding; had interrupted his submissions continually; had deprived him of an adequate opportunity to advance his submissions; had adopted a “selective and obscure approach” to the identification of the material before the Court; and had failed to take proper account of the reallocation of the action from the docket of Wigney J to her own docket.

43    Mr Martin has not advanced any submissions in support of these grounds and it is not apparent that they raise any matter which would warrant the Court to conclude that the decision of the primary Judge is attended by sufficient doubt to warrant reconsideration by the Full Court. My own consideration of the transcript of the hearing before the primary Judge does not suggest that there is a reasonable basis for any of these sub-grounds.

Conclusion on denial of procedural fairness

44    For these reasons, leave to appeal with respect to the alleged denial of procedural fairness is refused.

Ground 3: The refusal to order a further affidavit by Mr Cash

45    By [13] of the interlocutory application of 19 October 2018, Mr Martin sought an order that NRFA file and serve an affidavit setting out the nature and extent of the “reasonable enquiries” conducted by Mr Cash as to the existence and location of the documents required to be disclosed by the respondent, including the nature and extent of his enquiries as to the grounds for the claims of privilege made by NRFA.

46    The primary Judge declined to make an order to that effect. Her Honour said that she was not satisfied that there was cause for concern that the searches for documents falling within the scope of the order made by Wigney J on 21 June 2018, at [76].

47    Mr Martin has not advanced any submissions in support of a grant of leave on this ground. In particular, he has not sought to show an arguable case of error so as to bring this application within the principles for the grant of leave to which I referred earlier.

48    Accordingly, the application for a grant of leave with respect to Ground 3 is refused.

Legal professional privilege

Ground 4: The allegation of fraud

49    Mr Martin claims that the communications in issue are not protected by privilege because they were made in furtherance of a fraud (The Attorney-General for the Northern Territory v Kearney [1985] HCA 60, (1985) 158 CLR 500; R v Bell; ex parte Lees [1980] HCA 26, (1980) 146 CLR 141). This claim was founded principally on inferences Mr Martin submitted arise from statements made by Mr Cross in email correspondence concerning the commencement of the proceedings which occurred in the period between 19 and 23 September 2016. Mr Martin relied, in addition, on the apparent alteration by Mr Cross of the Originating Application in Action NSD1610/2016 after it had been accepted for filing and sealed by the Court. The alteration was the addition of the date (19 September 2016) and Mr Cross entering his signature.

50    The primary Judge noted that NRFA had not adduced evidence to rebut the inferences arising from the documents for which Mr Martin contended. Her Honour reviewed the material on which Mr Martin relied and concluded that the evidence was not sufficient to “displace the privilege”, at [135]. Her Honour gave reasons for that conclusion at [135]-[141], which it is not necessary to repeat presently.

51    Mr Martin has not pointed to any matter suggesting reason to doubt the correctness of her Honour’s assessment. In my view, he has not shown a basis, in accordance with the principles to which I referred earlier, for a grant of leave to appeal on this ground. Like the primary Judge, I note that the conclusion on this issue at the interlocutory stage does not preclude Mr Martin from pursuing this claim as a substantive matter at the trial.

Grounds 5 and 6: The quality of the evidence and the decision to inspect

52    There is some overlap between Grounds 5, 6 and 7. Ground 5 concerns the primary Judge’s assessment of the evidence to support the claims of privilege; Ground 6 the primary Judge’s decision to inspect the documents; and Ground 7 the question of whether members of NRFA were sufficiently independent and detached so that their communications and documents with respect to Mr Martin’s claims could attract legal professional privilege.

53    In relation to the quality of the evidence necessary to sustain a claim for privilege, a passage in the reasons of Brennan CJ in Commissioner of Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3; (1997) 188 CLR 501 at 513-4 has been influential:

When a claim of privilege attaching to a document seized under a warrant comes to be determined judicially, the court must ascertain for itself whether the document was brought into existence solely for a privilege purpose … In determining the claim of privilege, the court is not reviewing judicially an executive action but is determining a distinct controversy between the person who seeks to inspect the seized document and the person who seeks to maintain its immunity from inspection on the ground of legal professional privilege. To determine that controversy, the court must act upon admissible evidence, not upon hearsay.

54    In Hancock v Rinehart (Privilege) [2016] NSWSC 12, Brereton J relied on Propend and other authorities when saying:

[7]    To sustain a claim of privilege, the claimant must not merely assert it; but must prove the facts that establish that it is properly made. Thus a mere sworn assertion that the documents are privileged does not suffice, because it is an inadmissible assertion of law; the claimant must set out the facts from which the court can see that the assertion is rightly made, or in other words “expose ... facts from which the [court] would have been able to make an informed decision as to whether the claim was supportable”. The evidence must reveal the relevant characteristics of each document in respect of which privilege is claimed, and must do so by admissible direct evidence, not hearsay.

(Citations omitted)

55    Later, at [35], Brereton J stated his conclusion that:

(2)    A claim for privilege must be made on sworn direct evidence – not inadmissible hearsay or opinion – proving the facts on which the claim is founded. This is unaffected by the court’s discretionary power to require production in order to enable inspection for the purpose of adjudicating the claim, which exists to enable a claim for privilege to be scrutinised, not to enable it to be proved. No party – least of all the party claiming privilege – may insist that the court inspect the documents.

(Emphasis added)

56    Brereton J elaborated his view that the Court’s power to inspect the document is not to facilitate proof by a claimant of facts required to sustain a claim for privilege but to provide a means of enabling that claim to be scrutinised and tested. That discussion included the following:

[32]    [T]he essential issue on a claim for privilege is the purpose for which the document or communication in question was made. As that involves ascertaining the purpose of a person, the best direct evidence will be that given by the person whose purpose is in question. While purpose may be inferred from the document, direct evidence of it can be given by the person whose purpose it is. While the documents themselves may well illuminate the purpose for which they were created, to allow them to be used as evidence – let alone the sole evidence – in support of a claim for privilege, would be contrary to well-established practice. It would also be grossly unfair to the other party: if the only evidence of purpose is to be inferred from the document itself, the party seeking access is deprived of any opportunity to test the asserted purpose, which would defeat rather than promote the intent of enabling claims to be tested and scrutinised …

[33]    The unsatisfactory features of presenting the court with a bundle of documents and asking it to rule on a claim of privilege have been the subject of comment on many occasions. …

[34]    [I]n my view, such an approach is not merely unsatisfactory, but impermissible in principle. Whether the creature of judicial decision or, as I think more properly, rules of court, the court’s power to inspect documents – and to require their production for that limited purpose – was a response to the potential injustice in treating the claimant’s oath as conclusive. The power was not intended to detract from the requirement that a person claiming privilege prove, by admissible evidence, the grounds of the claim. While it is clear that the court may now require a document the subject of a claim of privilege to be produced so that it may inspect it for the purpose of ruling on the claim, that is quite a different notion from permitting a person claiming privilege to sustain the claim by adducing no testimonial evidence but asking the court to inspect the documents. …

(Citations omitted)

57    On the appeal, the New South Wales Court of Appeal agreed with the reasons of Brereton J at first instance: Rinehart v Rinehart [2016] NSWCA 58 at [29]-[31]. The Court added:

[31]    … The course proposed by Gina gives rise to ample scope for unfairness to all parties in that course, but especially unfairness to those seeking access. If the course proposed by Gina were followed, they would not be able to be heard effectively against such submissions as are put. That is not to deny that there may be occasions when it is appropriate for a court itself to inspect documents in order to resolve a contested claim of privilege, although, as the primary judge said, the unsatisfactory nature of that course has been remarked upon on many occasions. Much will depend on whether all parties consent to that course, the nature of the documents and the magnitude of the dispute.

[32]    The unfairness is manifest once the question of an appeal is considered. The first difficulty is in the formulation of reasons. Irrespective of whether the court finds in favour of or against the claim of privilege, the litigants are at least entitled to ask for reasons. Irrespective of the outcome, it will be difficult to supply reasons which do not disclose the privileged material relied upon.

58    These decisions in the Rinehart litigation have been followed in other jurisdictions: Lawrie v Carey DCM [2016] NTSC 23; Mortgage Results Pty Ltd v Millsave Holdings Pty Ltd (Legal Privilege) [2017] VSC 704.

59    There are some authorities which suggest that, on an interlocutory application concerning a claim for privilege, the standard of the evidence required may not be as high as that stated by Brennan CJ in Propend. See, for example, Re Southland Coal Pty Ltd [2006] NSWSC 899 at [26] and Tavcol Pty Ltd v Valbeet Pty Ltd [2016] NSWSC 1002, at [38].

60    In support of their claim of privilege, NRFA had relied upon the verification affidavit made by Mr Cash and on one of the affidavits made by Mr Toemoe on 5 December 2018. It is apparent that the primary Judge did not regard this evidence as very satisfactory. Her Honour said that the description of the documents for which privilege was claimed contained in a revised list provided to Mr Martin on 19 October 2018 “do not greatly assist with the task of assessing the privilege claim”, at [101]. Her Honour elaborated that view in [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.

61    With respect to Mr Toemoe, the primary Judge noted that he had had the conduct of the proceedings on behalf of NRFA only since 10 October 2018, at [103]. Her Honour accepted that Mr Toemoe had directed a solicitor within KWM to undertake an assessment of the claims for privilege made by NRFA and to bring to his attention any documents which “warranted closer scrutiny”, at [108]. The primary Judge found that that review had not extended beyond an inspection of the documents themselves. It seems that, on the basis of her Honour’s findings, and without her own inspection of the documents, NRFA may not have sustained the claim of privilege.

62    Ordinarily, it would rare for there to be a grant of leave to appeal against a judge’s decision to inspect the documents which are the subject of a disputed claim for privilege. That is especially so having regard to the well-known statement of Stephen, Mason and Murphy JJ in Grant v Downs [1976] HCA 63; (1976) 135 CLR 674 at 689 to the effect that the power to inspect documents may have been exercised too sparingly in the past.

63    However, in the present case, three matters incline me to the view that leave should be granted with respect to both Grounds 5 and Ground 6. The first is that the primary Judge appears to have regarded the evidence of Mr Cash and Mr Toemoe as being insufficient to sustain the claims for privilege. The second is that, in making the decision to inspect, the Judge did not refer to the principles discussed by Brennan CJ in Propend or by Brereton J in Hancock v Rinehart (Privilege). The third is that the consideration of these two matters appears, on my understanding, to be linked to the subject matter of Mr Martin’s proposed Ground 7, to which I refer next.

64    Accordingly, there will be a grant of leave to appeal with respect to Grounds 5 and 6.

Ground 7: The issue of independence

65    By Ground 7 of the draft Notice of Appeal, Mr Martin alleges errors by the primary Judge in finding that a particular category of documents is privileged. Following her inspection of the documents for which privilege was claimed, the Judge said:

[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.

66    Proposed Ground 7 complains of the Judge’s findings in [214] and can be taken therefore to be a complaint concerning the category described in [213(5)]. Mr Martin contends that the Judge erred in finding in [214] that Mr Cross had been “acting in a professional capacity as a lawyer viz a viz the other partners of NRFA as client” because, amongst other things, her Honour had rejected the approach adopted by Branson J in Rich v Harrington [2007] FCA 1987; (2007) 245 ALR 106.

67    The issue in Rich v Harrington was whether communications containing legal advice by the in-house Office of General Cousel (OGC) within the firm of PricewaterhouseCoopers Australia (PwC) was privileged. The OGC was himself a partner of PwC as was another senior solicitor within his office. The subject matter of the litigation involved allegations of sexual discrimination, bullying and harassment of a serious kind against certain members of the firm.

68    Branson J rejected the claim for privilege. Her Honour referred to Waterford v The Commonwealth of Australia [1987] HCA 25; (1987) 163 CLR 54 in which the High Court considered whether legal professional privilege attached to advice provided to the government from a salaried government lawyer. Her Honour noted passages in the joint reasons of Mason and Wilson JJ and in the reasons of Brennan J which indicated that privilege attaches to legal advice of a an independent character. Branson J also referred to the decisions of Graham J in Seven Network Ltd v News Ltd [2005] FCA 1551, (2005) 225 ALR 672 and in Telstra Corporation Ltd v Minister for Communications, Information Technology and the Arts (No 2) [2007] FCA 1445. In the former case, Graham J said 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.

69    Branson J then determined the claim for privilege by enquiring whether “the relationship between OGC and the respondents with respect to Ms Rich’s allegations was one of professional detachment”, at [58]. In resolving that question adversely to PwC, her Honour had regard to the nature of Ms Rich’s allegations and their potential significance for the OGC. Branson J noted specifically:

    the allegations were made by one partner against other partners;

    the General Counsel and Deputy General Counsel were themselves likely respondents in the litigation in prospect;

    the allegations were of a kind capable of tarnishing the reputation of PwC; and

    the subject matter of the litigation could attract a high level of media interest.

70    Branson J then concluded:

[60]    I therefore conclude that, having regard to the nature and significance of the allegations raised by Ms Rich in her letter of 2 July 2004, the relationship between OGC and the respondents was not such as to secure the advice of OGC concerning Ms Rich’s allegations the objectively independent character necessary to support the respondents’ claim of client legal privilege. 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.

71    The primary Judge noted that the decision in Rich v Harrington was applied by Boddice J in Aquila Coal Pty Ltd v Bowen Central Coal Pty Ltd [2013] QSC 82 at [10].

72    In Seven Network Ltd v News Ltd [2005] FCA 142, Tamberlin J said that the question of whether an employed legal advisor had the necessary degree of detachment was one of fact and degree:

[5]    The authorities recognise that in order to attract privilege the legal adviser should have an appropriate degree of independence so as to ensure that the protection of legal professional privilege is not conferred too widely. Commercial reality requires recognition by the courts of the fact that employed legal advisers not practising on their own account may often be involved to some extent in giving advice of a commercial nature related to the giving of legal advice. Such involvement does not necessarily disqualify the documents relating to that role from privilege. The matter is necessarily one of fact and degree and involves a weighing of the relative importance of the identified purposes.

73    In Dye v Commonwealth Securities Ltd (No 5) [2010] FCA 950, Katzmann J said, at [15] that Branson J may have overstated the position in concluding that legal professional privilege will arise only when the advice has an independent character. Likewise, in Archer Capital 4A Pty Ltd (as trustee for the Archer Capital Trust 4A) v Sage Group plc (No 2) [2013] FCA 1098; (2013) 306 ALR 384, Wigney J expressed doubts about the correctness of the approach in Rich v Harrington, at [72]-[73].

74    The primary Judge in the present instance declined to follow the approach of Branson J in Rich v Harrington. Her Honour said:

[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.

75    In addition, her Honour gave other reasons to which it is not necessary to refer presently.

76    The position is that there are conflicting decisions of Judges at first instance on the requirement for independence and/or detachment of the in-house legal advisor. Those issues are particularly acute in a case like the present in which the advisor is a member of the partnership to whom the advice is provided. The issue is made even more acute by NRFA’s admission that Mr Cross was the actor in some of the events on which Mr Martin relies for his causes of action. That circumstance by itself is capable of giving rise to issues concerning the independence of Mr Cross. Further, the primary Judge said, following her inspection of the documents for which privilege was claimed that, “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 an identified category of documents]”, at [165].

77    In my view, the difference in views of single members of the Court at first instance concerning the role of independence and detachment indicates that there is sufficient doubt about the correctness of the primary Judge’s decision on this issue. The importance of the documents to the case which Mr Martin wishes to advance is such that it can be concluded that he would suffer substantial injustice if leave be refused, assuming the decision to be wrong.

78    It is not necessary to address separately the remaining limbs of proposed Ground 7.

79    There will be a grant of leave to appeal with respect to the whole of Ground 7.

Ground 8: The independence of senior counsel

80    At one stage, NRFA had retained Mr Muddle SC to provide advice. Mr Muddle SC had provided advice at a time before the termination of Mr Martin’s staff partnership. Mr Martin submitted at first instance that the communications passing between Mr Muddle SC and Mr Cross and the other partners of NRFA concerning his removal from the partnership could not be the subject of privilege, in part because the advice was given at a time while Mr Martin remained a member of the firm and in part because the subject matter of the advice concerned a matter in respect of which Mr Muddle SC had previously provided advice. The primary Judge rejected that submission. Mr Martin has not shown any basis upon which the correctness of that conclusion should be doubted.

81    Leave is refused with respect to Ground 8.

Conclusion

82    For the reasons given above, leave to appeal is granted with respect to Grounds 5, 6 and 7 in the draft Notice of Appeal attached to the Application for Leave to Appeal filed on 25 February 2019. Leave to appeal is refused with respect to Grounds 1 to 4 inclusive and with respect to Ground 8.

Associate:

Dated:    15 July 2019