FEDERAL COURT OF AUSTRALIA

Carna Group Pty Ltd v The Griffin Coal Mining Company (No 2) [2019] FCA 2209

ORDERS

THE COURT ORDERS THAT:

1.    The third respondent’s interlocutory application, filed 28 November 2019, be adjourned with costs reserved.

2.    The second respondent’s interlocutory application, filed 12 December 2019, be adjourned with costs reserved.

3.    Order 2 sought by the first respondent’s interlocutory application, filed 29 November 2019, be dismissed with costs to be fixed.

4.    There be liberty to apply.

5.    Costs of the case management hearing be costs in the cause.

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

REASONS FOR JUDGMENT

MCKERRACHER J:

INTRODUCTION

1    The first respondent, The Griffin Coal Mining Company Pty Ltd, seeks further discovery or inspection of certain documents from the applicant, Carna Group Pty Ltd (in liquidation). At a case management hearing while making certain other orders made herewith and after hearing counsel for the parties and considering written and oral submissions, I dismissed the application for inspection. I considered that Carna had made out its claim for legal professional privilege in relation to the documents. These are my reasons.

EVIDENCE

2    Griffin seeks inspection of documents between Carna through its officers and employees and a solicitor, Mr Renato (Ronnie) Joseph Nardizzi. Griffin relies for evidentiary purposes on exchanges of correspondence, as does Carna. By Ms McNally’s first affidavit of 29 November 2019, she annexes a certificate from the Legal Practice Board of Western Australia indicating that Mr Nardizzi was certified practitioner on the Western Australian Roll of Practitioners. It is common ground that all material times Mr Nardizzi was an employee of Monadelphous Engineering Associates Pty Ltd. Prior to that time, he was engaged by another firm. At no time was Mr Nardizzi employed by Carna.

3    On 27 May 2019, Clayton Utz, solicitors for Carna, emailed Griffin’s solicitors indicating that certain communications were the subject of claims for legal professional privilege on the basis that those communications were brought into existence for the dominant purpose of obtaining legal advice. The claim pertained to emails between Mr Nardizzi, the legal practitioner said to be providing confidential and privileged advice to Carna and personnel of Carna in respect of which claims for legal professional privilege was raised on the basis ‘that they were brought into existence for the dominant purpose of obtaining legal advice’. Participants in the communications included Mr Mike Grey who was an officer of Carna. As will be seen, subsequently, Mr Grey has been a party to this proceeding being joined by Griffin, but the claim against him was discontinued. Mr Harry Carna is also a party to the proceedings, but has played no part at all in it. I infer that each of them was certainly not in the liquidator’s camp in the sense of being someone, who on the balance of probabilities would be likely to cooperate with the liquidator in providing information. Each may very well at one point have been in Carna’s ‘camp’, but clearly the position changed significantly when liquidators were appointed.

4    Ms McNally requested a copy of the engagement letter between Mr Nardizzi and his clients. Carna’s solicitors, Clayton Utz, indicated on 10 June 2019 that they had not been able to locate a copy of a retainer letter, but referred to an email from Griffin’s own discovery in which Mr Raj Kumar Roy of the Lanco Group referred to Mr Nardizzi as Carna’s lawyer. In addition, that email to Mr James Riordan (another party to this proceeding) dated 12 January 2014 said:

Discussions with Carna and their lawyer ([Mr Nardizzi]) went very transparently with [Mr Nardizzi] coming up with few risk issues for Carna. We have agreed in principles (sic) how to address those issue (sic) and Ronnie will send us the draft with those changes as next step.

…

5    By a second affidavit, sworn on 13 December 2019, Ms McNally annexed an email dealing with and rejecting Carna’s claim that it had not waived its privilege in correspondence of 10 December 2019 in relation to Mr Nardizzi. I will come to this correspondence shortly.

6    Griffin also purported to rely on an affidavit of Mr James Sprivulis, sworn on 11 December 2019 and filed on behalf of Carna. Relevantly, it referred to the 10 December 2019 correspondence mentioned above, stating that he did not intend to waive Carna’s legal privilege in any of the Nardizzi documents. The document produced, to the extent relevant, notes that pursuant to s 118(a) of the Evidence Act 1995 (Cth), legal professional privilege attaches to any confidential communication made between a ‘client; and a ‘lawyer’ for the dominant purpose of the lawyer providing legal advice to the client. It noted that further grounds on which legal professional privilege apply were set out in s 118(b) and s 118(c). Reference was also made to s 117 of the Evidence Act defining a lawyer to include an Australian lawyer, which clearly covered Mr Nardizzi. It was noted that ‘client’, pursuant to s 117(1) of the Evidence Act, included ‘a person or body who engages a lawyer to provide legal services’. Reference was made to Apple Computer Australia Pty Ltd v Wily [2002] NSWSC 855 in which Barrett J held that:

(a)    whether a lawyer/client relationship exists is to be determined by reference to the intentions of the relevant parties objectively ascertained: (at [7]); and

(b)    the term ‘client’ must ordinarily be regarded as referring to a person who, in respect of some legal matter within the scope of professional services normally provided by lawyers, has, with the consent of a lawyer, come to stand in a relationship of trust and confidence with the lawyer entailing duties of the lawyer to promote the person’s interests, protect the person’s rights and to respect the person’s confidences: (at [11]).

7    The letter continued:

…

6.    Solely for the purpose of responding to your Application, and without waiving our client’s privilege over any Nardizzi Documents, we enclose with this letter an email that was sent by [Mr Grey] of Carna to Mr Nardizzi and Harry Carna on 6 January 2014 ... In this email, Mr Grey:

(a)    thanks Mr Nardizzi for his “comments, suggestions and recommendations” on the draft Mining Services Contract attached to Mr Grey’s email; and

(b)    asks Mr Nardizzi to advise Carna of the fee payable for Mr Nardizzi’s services.

7.    Self-evidently, the services provided by Mr Nardizzi to Carna (being comments, suggestions and recommendations on a Mining Services Contract the subject of ongoing negotiation) were “legal services” for the purposes of the “client” definition in section 117(1) of the [Evidence Act].

8.    It is also evident from [this email] that:

(a)    Carna considered Mr Nardizzi to be a provider of valuable legal services;

(b)    with the consent of Mr Nardizzi, Carna had come to stand in a relationship of trust and confidence with Mr Nardizzi (particularly given Mr Nardizzi’s close knowledge of Carna’s ongoing contractual negotiations with Griffin); and

(c)    Mr Nardizzi, as an Australian lawyer holding a current practising certificate, was subject to duties to promote Carna’s interests, and not disclose any confidential Carna information (as doing so would constitute a breach of his obligations as a practising Australian lawyer).

…

(Emphasis in original.)

Liability to produce was declined.

8    The email referred to was provided with that communication.

THE PRINCIPLES

9    The relevant provisions of the Evidence Act are indeed ss 117, 118 but also 122 which relevantly provide as follows:

117    Definitions

(1)    In this Division:

   client includes the following:

(a)    a person or body who engages a lawyer to provide legal services or who employs a lawyer (including under a contract of service);

(b)    an employee or agent of a client;

…

   confidential communication means a communication made in such circumstances that, when it was made:

   (a)    the person who made it; or

   (b)    the person to whom it was made;

   was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law.

confidential document means a document prepared in such circumstances that, when it was prepared:

(a)    the person who prepared it; or

(b)    the person for whom it was prepared;

was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law.

lawyer means:

(a)    an Australian lawyer; and

…

118    Legal advice

Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of:

(a)    a confidential communication made between the client and a lawyer; or

…

for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client.

…

122    Loss of client legal privilege: consent and related matters

(1)    This Division does not prevent the adducing of evidence given with the consent of the client or party concerned.

(2)    Subject to subsection (5), this Division does not prevent the adducing of evidence if the client or party concerned has acted in a way that is inconsistent with the client or party objecting to the adducing of the evidence because it would result in a disclosure of a kind referred to in section 118, 119 or 120.

(3)    Without limiting subsection (2), a client or party is taken to have so acted if:

(a)    the client or party knowingly and voluntarily disclosed the substance of the evidence to another person; or

(b)    the substance of the evidence has been disclosed with the express or implied consent of the client or party.

(4)    The reference in paragraph (3)(a) to a knowing and voluntary disclosure does not include a reference to a disclosure by a person who was, at the time of the disclosure, an employee or agent of the client or party or of a lawyer of the client or party unless the employee or agent was authorised by the client, party or lawyer to make the disclosure.

(5)    A client or party is not taken to have acted in a manner inconsistent with the client or party objecting to the adducing of the evidence merely because:

(a)    the substance of the evidence has been disclosed:

(i)    in the course of making a confidential communication or preparing a confidential document; or

(ii)    as a result of duress or deception; or

(iii)    under compulsion of law; or

(iv)    if the client or party is a body established by, or a person holding an office under, an Australian law—to the Minister, or the Minister of the Commonwealth, the State or Territory, administering the law, or part of the law, under which the body is established or the office is held; or

(b)    of a disclosure by a client to another person if the disclosure concerns a matter in relation to which the same lawyer is providing, or is to provide, professional legal services to both the client and the other person; or

(c)    of a disclosure to a person with whom the client or party had, at the time of the disclosure, a common interest relating to the proceeding or an anticipated or pending proceeding in an Australian court or a foreign court.

(6)    This Division does not prevent the adducing of evidence of a document that a witness has used to try to revive the witness’s memory about a fact or opinion or has used as mentioned in section 32 (Attempts to revive memory in court) or 33 (Evidence given by police officers).

10    It is common ground that a person claiming privilege must prove by admissible evidence the grounds of the claim. It would normally be expected that someone would produce evidence on oath or affirmation as to the purpose for which the disputed documents were created. It may, in an appropriate case, be open to the Court to examine the relevant documents to form a view as to whether the claim for privilege is properly made out. (Appropriately I think, no party in this proceeding has suggested such a course.)

11    A mere assertion the documents are privileged can never 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 (Gardner v Irwin. (1879) 4 Ex D 49 (at 53)). But there are a number of ways in which this might be done and regard should be had to all the circumstances in determining the correctness of the assertion. The claimant should expose ‘facts from which the [Court] would have been able to make an informed decision as to whether the claim was supportable’: National Crime Authority v S (1991) 29 FCR 203 per Lockhart J (at 211). Brereton J in Hancock v Rinehart [2016] NSWSC 12 (at [7]), noted that 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, rather than by hearsay’. In Hastie Group Ltd (in liq) v Moore [2016] NSWCA 305, the Court of Appeal of New South Wales (Beazley P and Macfarlan JA) (at [29]-[34]) stressed that the facts in every case were different and that the remarks made in Hancock, particularly about hearsay evidence, should be construed to relate to inadmissible hearsay evidence, as distinct from admissible hearsay evidence (as the evidence is in this case). At [29]-[34], the Court said:

29    The respondents contended that in order to satisfy that onus, it was insufficient to rely on hearsay evidence. Rather, Hastie Group were required to adduce evidence of primary facts and had not done so. The respondents submitted, by way of example, that if privilege was claimed over a report to be provided to counsel, a statement to the effect, “[my] only reason for obtaining this report was because I wished to obtain it to provide to counsel, so that counsel could give me an advice”, would be sufficient.

30    They further submitted that, on the evidence, it was apparent that the Report was prepared for the purpose of provision to CFA to assist in its decision as to whether to provide litigation funding. In other words, it was a report that went to the potential creation of the relationship.

Determination

31    In our opinion, Hastie Group has done enough to satisfy the onus they bore to establish that the Report is privileged. There are two principal reasons that have led us to that determination.

32    First, we consider that the respondents’ contention as to the evidence required to satisfy the onus a claimant of client legal privilege bears raises the bar to a level that is not in accordance with the statement of the plurality in Grant v Downs in the passage set out above at [13].

33    We acknowledge that there are statements in the first instance authorities, and in particular, in Hancock v Rinehart (Privilege), which might be thought to support that submission. However, as is accepted, every case depends on its own facts and, as is stated by the plurality in Grant v Downs, there may be circumstances from which privilege may be established without the need for evidence of the detail that the respondents contend is required.

34    We are also of the opinion that the Court is not confined to the express statements made in support of the claim for privilege. The Court is entitled to draw inferences from other proved facts. That is of particular relevance in the present case.

12    Leeming JA refused to grant leave to appeal, but not for reasons which I would regard as being at all inconsistent with these observations of the plurality.

13    In relation to the topic of hearsay and inference, I would also respectfully agree with what was said by Rees J in Re Global Advanced Metals Pty Ltd [2019] NSWSC 1545, where claims for privilege were upheld (at [16]-[18]):

16    As to the proposition that evidence in support of a claim for privilege must be “admissible direct evidence, not hearsay”, Brereton J referred to Commissioner of Australian Federal Police v Propend Finance Pty Limited (1997) 188 CLR 501 at 503-4; [1997] HCA 3 where Brennan CJ made such a statement. I note that the Chief Justice’s judgment in Propend is one of five majority judgments; the other majority judgments do not make a statement to like effect nor refer to the Chief Justice’s reasons. Nor, of course, is there a strict dichotomy between admissible evidence, on the one hand, and hearsay, on the other: there is admissible hearsay evidence, such as business records. This is consistent with Brereton J’s statement, at [35(2)] of Reinhart, that a claim must be made on “sworn direct evidence — not inadmissible hearsay or opinion” (emphasis added).

17    I do not think the Chief Justice had in mind in Propend to revise the application of the Evidence Act including in respect of interlocutory hearings. Although Propend was handed down in 1997, the judgment at first instance was decided before the enactment of the Evidence Act 1995 (Cth), and so was not argued with the present legislation in mind. In any case, the privilege claimed was in relation to search warrants and the source of the privilege was the common law. The question was whether allegations of improper purpose such as to displace a claim for privilege could be founded upon hearsay evidence rather than whether a claim for privilege can rest upon hearsay. The decision was final, not interlocutory, and section 75 of the Evidence Act would not have applied in any case. The matter at hand, by contrast, is interlocutory for the purposes of section 75, as it arises in the course of proceedings: see, for example, Kennedy v Wallace (2004) 208 ALR 242; [2004] FCA 332 at [110] ff. Consistently with this, the Court of Appeal in Rinehart v Rinehart envisaged the evidence on such an application might be given on information and belief: at [26]; see also Hastie Group Ltd (In Liq) v Moore (t/as Deloitte Touche Tohmatsu) (2016) 339 ALR 635; [2016] NSWCA 305 at [32]–[34].

18    Global Advanced Metals submitted that the solicitor’s third affidavit did not fill the evidentiary lacuna having regard to Hancock v Rinehart and Propend, and had other deficiencies. Bearing in mind that the onus may be discharged “by reference to the nature of the documents supported by argument or submissions” (AWB v Cole), I consider that the evidence relied upon by Metallurg in toto is sufficient to establish a claim for privilege — albeit without the finesse and overwhelming force one may be accustomed to seeing in large, commercial litigation. The circumstances in which the affidavits were prepared may account for this: urgency, an overseas witness and a parallel substantive hearing. Global Advanced Metals agreed that I should inspect the documents in those circumstances, which I have done, so as to determine whether Metallurg’s claim should be upheld under sections 118 and 119 of the Evidence Act.

14    I also note that a different perspective on hearsay evidence was given in Tavcol Pty Ltd v Valbeet Pty Ltd [2016] NSWSC 1002, where McDougall J said (at [36]-[37]):

36    Ms Painter also relied on what Brereton J had said in Hancock (Privilege) at [35(2)] – that there must be “sworn direct evidence – not inadmissible hearsay or opinion”. She submitted, further that there should have been, but was not, “direct evidence… given by the person whose purpose is in question”: Brereton J in Hancock (Privilege) at [32].

37    I do not accept that hearsay evidence may not be relied upon. The application is interlocutory in character. It is accordingly subject to s 75 of the Evidence Act, which renders admissible (although it says nothing about the weight of) hearsay evidence if there is evidence of the source:

75    Exception: interlocutory proceedings

In an interlocutory proceeding, the hearsay rule does not apply to evidence if the party who adduces it also adduces evidence of its source.

15    I do not see any difficulty in production of the company’s records by the liquidator in order to demonstrate and prove the facts on which a claim for privilege is asserted. Of course the hearsay evidence must be admissible hearsay evidence. In this instance, I am satisfied that it is admissible. As to whether the admissible evidence discharges the onus on the balance of probabilities, a number of matters may be taken into consideration. If clearly better evidence were apparently readily available, this would be a significant factor which might be taken into account against discharging the onus.

16    In McKenzie v Cash Converters International Ltd [2017] FCA 1564, Markovic helpfully set out relevant principles (at [61]-[67]) albeit dealing with a common law claim rather than a claim under the Evidence Act:

61    The following principles can be shortly stated:

(1)    legal professional privilege "is a rule of substantive law and an important, indeed fundamental, common law right or immunity": DSE (Holdings) Pty Ltd v Intertan Inc (2003) 127 FCR 499 (DSE v Intertan) at [24];

(2)    the privilege exists "to serve the public interest in the administration of justice by encouraging full and frank disclosure by clients to their lawyers": Esso at [35];

(3)    in the case of legal advice privilege, a confidential communication will attract the privilege if it was made for the dominant purpose of giving or obtaining legal advice: Esso at [61]; The Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 at [9]. In AWB Ltd v Cole (No 5) (2006) 155 FCR 30 (AWB (No 5)) at [44(7)] Young J noted that the concept of legal advice is fairly wide and that "[i]t extends to professional advice as to what a party should prudently or sensibly do in the relevant legal context; but it does not extend to advice that is purely commercial or of a public relations character"; and

(4)    the party claiming privilege bears the onus of proving that the communication was made or the document created for the dominant purpose of giving or obtaining legal advice, although there is no fixed or rigid rule as to the nature and content of the evidence that is required to discharge that onus: see Grant v Downs (1976) 135 CLR 674 (Grant v Downs) at 688-689 (per Stephens, Mason and Murphy JJ); and

(5)    the Court retains a 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”: Grant v Downs at 689; Esso at [52]. In AWB (No 5) Young J said at [44(12)]:

The Court has power to examine documents over which legal professional privilege is claimed. Where there is a disputed claim, the High Court has said that the court should not be hesitant to exercise such a power: Esso; see also Grant v Downs at 689. If the power is exercised, the court will need to recognise that it does not have the benefit of submissions or evidence that might place the document in its proper context. The essential purpose of such an inspection is to determine whether, on its face, the nature and content of the document supports the claim for legal professional privilege.

62    As to the standard of proof required, in National Crime Authority v S (1991) 29 FCR 203 at 211-212 Lockhart J, with whom Keely J agreed, said that it was not sufficient for a party claiming privilege to merely assert that claim without exposing the facts on which the claim is based.

63    In Barnes v Commissioner of Taxation (Cth) (2007) 242 ALR 601; [2007] FCAFC 88 (Barnes) a Full Court of this Court (Tamberlin, Stone and Siopis JJ) considered the nature of the evidence required to establish a claim for legal professional privilege. At [18] their Honours said:

The authorities emphasise the need for focused and specific evidence in order to ground a claim for legal professional privilege. In Kennedy v Wallace (2004) 142 FCR 185; 213 ALR 108; [2004] FCAFC 337 (Kennedy), Black CJ and Emmett J reiterated the principles that verbal formulae and bare conclusory assertions of purpose are not sufficient to make out a claim for privilege: see also National Crime Authority v S (1991) 29 FCR 203 at 211; 100 ALR 151 at 158-60 (per Lockhart J); Grant at CLR 689; ALR 589 (per Stephen, Mason and Murphy JJ). Where possible the court should be assisted by evidence of the thought processes behind, or the nature and purpose of advice being sought in respect of, each particular document. The fact that generalised evidence is not challenged in cross-examination does not mean that such evidence must be accepted, particularly when it is as manifestly inadequate as it is in this case. As in Kennedy, mere general assertions of the purpose of creation of the documents are insufficient to discharge this onus. Even though in that case some evidence as to the purpose of particular records was adduced, Allsop J at [168] considered that the onus had not been discharged because the evidence did not permit a conclusion to be drawn as to the dominant purpose of the creation of any particular document or entry in a document. Simply to show that one purpose for creation of the document was to obtain legal advice or assistance is not good enough.

(original emphasis)

64    The application before me is interlocutory. It is well established that in an application of this kind it is open to follow the usual practice taken when receiving evidence in interlocutory applications and that s 75 of the Evidence Act applies: Kirby v Centro Properties Ltd (No 2) (2012) 87 ACSR 229; [2012] FCA 70 (per Bromberg J) at [14]; Morton v Bolinda Publishing Pty Limited [2017] FCA 187 (per Burley J) at [61].

65    Ms McKenzie's application raises the issue of whether there has been an implied or imputed waiver of the legal professional privilege that would otherwise attach to certain communications. In Mann v Carnell (1999) 201 CLR 1 (Mann v Carnell) a majority of the High Court (Gleeson CJ, Gaudron, Gummow and Callinan JJ) held at [29] that 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". Their Honours continued:

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.

66    In DSE v Intertan Allsop J, as his Honour then was, observed that:

(1)    the principle in Mann v Carnell is the “overriding guiding principle” and “[t]he expression of that principle and the subordination of the notion of 'fairness' to possible relevance in the assessment of the inconsistency between the act and the confidentiality of the communication produces … an important change to the existing law” (original emphasis): at [14];

(2)    it is important to recognise that legal professional privilege is a fundamental common law right or immunity in appreciating “the operation of inconsistency, as opposed to some more broad ranging notion of fairness informed, perhaps, by balancing of competing interests in the administration of justice”: at [24]; and

(3)    the "confidentiality is in the nature of an entitlement or a right to keep the communications immune from disclosure; it is acting inconsistently with it that destroys that fundamental entitlement" (original emphasis): at [24].

67    In Commissioner of Taxation v Rio Tinto Ltd (2006) 151 FCR 341 (Rio Tinto) a Full Court of this Court (Kenny, Stone and Edmonds JJ) said at [45]:

Where, as here, one party alleges that another has impliedly waived legal professional privilege, a court is bound to analyse the acts or omissions of the privilege holder that are said to be inconsistent with the maintenance of the privilege. In concluding that the Commissioner had waived the privilege in the eight contested documents, the docket judge in fact applied the “inconsistency” principle of Mann, as he was obliged to do: see Rio Tinto (2) at [20]. Plainly enough, the inquiry that it mandates focuses on the facts of the particular case. It follows that other cases in which implied waiver has been considered provide limited guidance unless they arise out of similar facts.

GRIFFIN’S ARGUMENT

17    Griffin contends that Carna has failed to discharge its onus of establishing that the information or documents in question are privileged as there is no sworn evidence before the Court from Carna, other than Mr Sprivulis’ affidavit, which it is said, does not do enough. Moreover, it is said, by producing the email from Mr Grey to Mr Carna and Mr Nardizzi, copied to Mr Grey’s personal email address on 6 January 2014 (the fee for services email) acknowledging for Carna, as its business development manager, appreciation for the advice of Mr Nardizzi in requesting a fee for his services, Carna in effect waived any privilege claim.

18    Griffin relies on Hancock, where Brereton J observed (at [34]) that to proffer documents for inspection by the Court is inconsistent with maintaining a claim for privilege. It is clear, in this instance however, that the documents in respect of which the privilege has been claimed have not been offered for examination by the Court or by Griffin, but only the document which Carna says proves the privileged nature of the communications.

19    One of the fundamental issues was the contention advanced for Griffin that Carna’s failure to call witnesses who would be able to explain Mr Nardizzi’s role leaves it open to the Court to draw an inference that their evidence would not have assisted Carna’s claim. Of course, any inference to be drawn pursuant to the principles under Jones v Dunkel (1959) 101 CLR 298 is entirely discretionary. Moreover, this circumstance is very different from the circumstance in Hancock where key witnesses might readily have been called or adduced affidavit evidence. In the present instance, Carna is in liquidation and the only witnesses on the face of the communications who might have clarified in greater detail, should it be necessary, the nature of the exchanged communications, are witnesses who are, for all practical purposes, either adversaries to or distanced from the liquidator. One of them is a current party to the proceeding and one of them is a former party to the proceeding. Griffin stresses that no one involved in sending or receiving the documents the subject of the application has been called by Carna to give evidence regarding the purpose for which they were created. This, it is said, leaves Carna devoid of any testimonial evidence on the essential facts it must prove. In particular, evidence from:

(a)    office holders or employees of Carna, such as Mr Grey, who sent the email, and Mr Carna who received it;

(b)    Ms Natalie Wigg, a lawyer at Squire Sanders, which firm was engaged by Carna. Griffin notes that Mr Nardizzi was blind copied into a confidential email from Mr Grey to Ms Wigg on 13 January 2014; and/or

(c)    Mr Nardizzi, who continues to work at Monadelphous.

20    Reliance is also placed upon McKenzie where Markovic J, relying upon Hancock, said (at [40]):

Hancock concerned a claim for legal professional privilege by Mrs Rinehart over certain documents produced to the court, without objection, by Sceales & Company Lawyers in answer to a subpoena. At [5] Brereton J noted that it was not in dispute that Mrs Rinehart, as the person making the claim for privilege, bore the onus of proving the facts on which the claim for privilege was founded. At [7] his Honour said:

“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.”

(footnotes omitted)

21    Once again, the factual circumstances in McKenzie, like Hancock, were very different from the present factual circumstances where the persons who might possibly throw additional light on the circumstances surrounding the creation of the documents are, in practical terms, well outside the liquidators’ camp.

CONSIDERATION

22    For reasons which follow, I am satisfied that privilege attaches to the Nardizzi documents as they are clearly confidential communications between an Australian lawyer, Mr Nardizzi, and a client, Carna, for the dominant purpose of the lawyer providing legal advice to the client. That is unquestionably so, at least by way of inference from the face of the documents, which reveal that:

(a)    Mr Nardizzi was a lawyer at the time the documents were created;

(b)    Carna engaged Mr Nardizzi to provide legal services, being legal advice relating to the proposed Mining Services Contract between Carna and Griffin. This is entirely apparent from any objective assessment of the parties’ intentions, including:

(i)    the content of the fee for services email; and

(ii)    the email of 12 January 2014 referred to above from Mr Roy to Mr Riordan, which refers to discussions between Carna and Carna’s lawyer, ‘Ronnie’.

23    The existence of the fee for services email and the 12 January 2014 email have been established on oath. I fully accept that in circumstances quite different from the present, a more fulsome explanation would be expected if, for example, hypothetically, Carna were not insolvent and were pursuing Griffin for a claim. In those circumstances, the persons identified would be within Carna’s camp and be expected to give evidence.

24    As to the two solicitors identified by Griffin, especially Mr Nardizzi, their position is entirely neutral. If Mr Nardizzi was providing legal advice, as it seems clear on the balance of probabilities he was doing, for him to actually say so on affidavit– if indeed he, as a stranger to this litigation, would reveal that information - would add little. As to the other solicitor, it is quite unclear how she might throw further light on the nature of these communications. To infer that she would, would be for the Court to impermissibly speculate.

25    Importantly, no party has suggested and certainly no evidence has been produced to suggest that Mr Nardizzi has ever played any role other than providing the advice to which the communications relate. There is, at this stage, no plausible evidence or reason to believe that some of the documents in respect of which privilege is claimed might be relevant to the proceeding in some way other than the provision of legal advice.

26    The limited documents produced on oath on their face acknowledge provision of legal advice to Carna. This satisfactorily discharges Carna’s obligation to claim legal professional privilege in respect of the documents over which inspection is sought.

27    Finally, as to the contention that, by producing the fee for services email, privilege in respect of all the documents for which it has been claimed has been waived, I disagree. First, it was expressly provided on the basis that it did not waive Carna’s privilege in any of the Nardizzi documents. But, in any event, production of that document was consistent with the maintenance of privilege over the Nardizzi documents as it is quite apparent that the sole reason for its disclosure was to evidence the basis for the privilege claim. Both emails which together prove the asserted privilege and which do not reveal the substantive legal advice or any part of it do not fall within s 122(3) of the Evidence Act.

28    The absence of a ‘retainer’ is not conclusive. The question of whether or not a lawyer/client relationship exists is to be determined by the intentions of the parties objectively ascertained: Apple Computer (at [7] and [11]).

29    As to the related observation by Griffin that Carna usually sought legal advice from another firm, this does not carry the argument any further. It is entirely plausible that Carna might also seek advice from another lawyer who is, for example, experienced in a particular area in relation to contracts. That is not a factor which would weigh in favour of Griffin’s contentions.

CONCLUSION

30    In my view, Griffin’s application must be dismissed. In written submissions, Carna wished to be heard on indemnity costs, but, correctly in my view, no oral claim for indemnity costs was made at the hearing. Costs on the usual basis should follow the event and I ordered accordingly.

Associate:

Dated:    16 January 2020