Federal Court of Australia

Mouawad as liquidator of DCA Capital Pty Ltd (in liq) v Balanian (Privilege) [2025] FCA 1637

ORDERS

THE COURT ORDERS THAT:

1.    The time for an application to review the orders of Registrar White made on 30 October 2025 be extended to 21 November 2025.

2.    The first defendant’s interlocutory application lodged for filing on 20 November 2025 be otherwise dismissed.

3.    The first defendant pay the plaintiffs’ costs of the interlocutory application as agreed or assessed.

4.    The time for service of the interlocutory process of the Australian Securities and Investments Commission dated 16 December 2025 (the ASIC interlocutory process) be abridged such that the provision of an unsealed copy of it by 6:30pm on 16 December 2025 to the following email addresses is deemed to be effective service:

(a)    Blake.O'Neill@eralegal.com.au;

(b)    sal@advaloremlaw.com.au; and

(c)    adrian@agedwards.com.au.

5.    Leave be granted to the Australian Securities and Investments Commission, as an interested person, to be heard on the application filed by the first defendant on 24 November 2025 and listed before Justice Kennett on 17 December 2025.

6.    The undertakings given to the Court by Nigel Carson and Kaustav Mehta, of Digital Trace Australia, on 27 May 2024, be varied such that paragraph 2 of the undertaking is to be read as follows:

I will retain custody of all things removed from the premises by me pursuant to this warrant until delivery to the Court, further order of the Court or unless required by a notice issued to me by the Australian Securities and Investments Commission pursuant to section 33 of the Australian Securities and Investments Commission Act 2001 (Cth) to produce some or all of those things to a specified member or staff member, at a specified place and time.

7.    There be no order as to the costs of the ASIC interlocutory process.

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

REASONS FOR JUDGMENT

(Delivered ex tempore, revised from transcript)

KENNETT J:

Introduction

1    Pursuant to orders made by Cheeseman J on 27 May 2024, a warrant was issued under s 530C of the Corporations Act 2001 (Cth) authorising the search for and seizure of a company’s books and records at the residence of the first defendant (Mr Balanian) and another location. The warrant provided for the appointment of IT experts and an independent lawyer.

2    On 29 May 2024 the warrant was executed at Mr Balanian’s residence and a number of electronic devices were seized or digitally copied. Cheeseman J made orders on 28 June 2024 providing for the IT experts to review the contents of these devices and provide a report to the Court, the independent lawyer and Mr Balanian’s representatives. Mr Balanian’s solicitors were required to provide a schedule of information or items referred to in the report in relation to which any claim of privilege was made. The plaintiffs’ representatives were to receive a copy of the report with references to any material asserted to be privileged redacted. These orders were later amended in certain respects and the reporting process took some time.

3    On 27 June 2025 Cheeseman J ordered that Mr Balanian was to make any claim of privilege seeking to preclude inspection or production of things seized pursuant to the warrant by 10 July 2025 and referring any such claims to a Registrar. Mr Balanian’s solicitors filed and served a notice of claims on 12 August 2025. These included claims of legal professional privilege over a large number of documents, as to which the “Nature and basis of claim” was described as:

Legal Privilege claimed; the document was created for the purpose of the First Defendant receiving legal advice from his solicitor, Tean Kerr.

4    On 11 September 2025, by which time Mr Balanian had changed legal representatives and was represented by his current solicitor, Registrar White made orders for Mr Balanian to file and serve any further evidence in relation to privilege by 25 September 2025 and for the plaintiffs to file and serve a response by 2 October 2025. No further evidence was filed or served by Mr Balanian. The liquidators nevertheless filed and served a schedule objecting to each of the privilege claims.

5    Orders were then made by consent which included the outstanding claims of legal professional privilege being heard on 30 October 2025. The matter came before Registrar White on that day and the claims were dismissed (apparently without substantive argument or the provision of reasons). The Registrar pronounced orders requiring the IT experts to provide unredacted versions of the relevant material to the Court and the legal representatives of the parties by 4:00pm on 6 November 2025.

6    Because of a delay in obtaining a transcript, the orders pronounced on 30 October 2025 were not available in written form and not able to be entered until 13 November 2025. This necessitated an amendment to the date for production set out in the orders, which was apparently effected without objection through a series of emails that were copied to the solicitors for all parties. The orders as entered required provision of the material by 4.00pm on the third business day after entry (which was 18 November 2025). The independent lawyer provided the plaintiffs’ solicitors, Mr Balanian’s solicitors and the Court with a link to the unredacted material on the evening of 17 November 2025.

7    On 20 November 2025 Mr Balanian lodged for filing an application seeking review of the orders made by Registrar White and re-determination of the privilege issues by a judge (the interlocutory application). The interlocutory application sought an interim stay of the Registrar’s orders. However, by the time it was filed, the orders had been carried into effect; indeed it appears that, by the time the interlocutory application was served on the plaintiffs’ solicitors, they had commenced their review of the unredacted material and had examined at least some of the documents over which privilege is claimed.

8    Additionally, the interlocutory application sought the return of the devices seized from Mr Balanian’s residence.

9    The interlocutory application was referred to me and listed for case management on 2 December 2025. Seeking to avoid a drawn out process that would jeopardise the timetable for the filing of evidence in the substantive proceeding, I set a compressed timetable for evidence and submissions so as to bring the interlocutory application on for hearing today. I directed the plaintiffs not to have any further access to the documents subject to claims for privilege pending the determination of the interlocutory application.

10    Mr Balanian relied on affidavits affirmed by his solicitor, Mr Scevola, on 20 November and 10 December 2025. The plaintiffs relied on an affidavit affirmed by an employed solicitor, Mr Blackie, on 16 December 2025. Each also filed written submissions.

11    On the afternoon of 16 December 2025 the parties were served with an interlocutory process and supporting affidavit sought to be relied on by the Australian Securities and Investments Commission (ASIC). Counsel for ASIC appeared at the hearing today. ASIC sought to be heard against the return of the devices to Mr Balanian and sought an additional order. These issues are discussed below.

Extension of time

12    The first issue that calls for attention is the timing of the interlocutory application. Because the orders of the Registrar took effect when pronounced (Federal Court Rules 2011 (Cth), r 39.01), the last day for filing an application for review of those orders, pursuant to r 3.11(2), was 20 November 2025. The interlocutory application was lodged for filing on that day. However, the date stamp on the application shows that it was lodged electronically at 4:53:50pm, with the result that it is taken to have been filed on the following day (r 2.25(3)) and is therefore out of time.

13    The interlocutory application sought an extension of time to the extent one was required. The plaintiffs do not resist an extension of time and it will therefore be granted. However, the timing of the interlocutory application — after the orders of the Registrar had been complied with and the allegedly privileged material had been provided to the plaintiff’s solicitors — has some relevance which I will mention later.

The claim for privilege

14    The review of orders made by a Registrar involves a hearing de novo and it is therefore not necessary to dwell on the procedure that unfolded before the Registrar. However, it is appropriate to observe that the Registrar’s decision appears to have been the correct one in circumstances where no evidence had been filed in support of Mr Balanian’s claims for privilege.

15    In his written submissions, Mr Balanian articulates the claim for privilege by reference to provisions of the Evidence Act 1995 (Cth) (the Evidence Act). However, these provisions do not apply to production of documents under pre-trial processes (let alone found a claim by an asserted privilege holder to prevent disclosure by another person pursuant to an order of the Court). The claim must therefore be determined by reference to common law principles of legal professional privilege (see eg Singtel Optus Pty Ltd v Robertson [2024] FCAFC 58 at [24] (Murphy, Anderson and Neskovcin JJ) (Singtel Optus)). Ultimately the parties agreed that this was the correct approach but that it makes little if any difference to the analysis.

16    The principles relating to legal professional privilege are well established and there is no need to elaborate upon them here. They were set out by the Full Court in Singtel Optus at [23]-[32]. The following points are significant.

(a)    The protection is confined, relevantly here, to confidential communications made for the dominant purpose of giving or obtaining (including preparation for obtaining) legal advice or the provision of legal services.

(b)    The purpose for which a document was brought into existence is a matter of fact, to be determined objectively having regard to the evidence and the nature of the document.

(c)    The purpose of obtaining legal advice or services must be paramount or predominant; it is not sufficient for it to have been one of several purposes in creating the document.

(d)    The party asserting privilege bears the onus of establishing that it exists, including each factual element to establish the purpose for which the document was created.

17    As to the nature of the onus that falls on the person asserting privilege, the plaintiffs refer to Hancock v Rinehart (Privilege) [2016] NSWSC 12 at [7], where Brereton J 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).

18    As currently advanced by way of the interlocutory application, the claims for privilege relate to the documents referred to in a series of schedules which are reproduced in Annexure SS2 to Mr Scevola’s affidavit of 10 December 2025.

19    Each entry in those schedules lists Haig Panossian as “Author” and Mr Balanian as “Recipient”. Mr Scevola deposes to having been instructed by Mr Balanian that Mr Panossian is “his US Legal Attorney”. I accept for present purposes that this is the case and that legal professional privilege may attach to confidential communications between Mr Panossian and Mr Balanian (see eg Kennedy v Wallace [2004] FCAFC 337; 142 FCR 185 at [198]ff (Allsop J)). However, it is not appropriate to assume that the documents are privileged merely because Mr Panossian is a legal practitioner and Mr Balanian is his client. For example, documents effecting or evidencing transactions are not privileged, even if the transaction was undertaken on legal advice. Nor are documents produced in the course of non-legal activities or services performed by a lawyer.

20    Both parties invited me to inspect samples of the documents listed in Annexure SS2. I was reluctant to do so because inspecting a few documents chosen by one side or the other would not tell me anything useful about the entire class of documents in relation to which privilege is claimed. It was accepted that it would be infeasible for me to inspect every document. The way the case has been presented means that the claim for privilege must stand or fall in relation to the whole class of documents referred to in Annexure SS2. However, a small set of documents tendered by the plaintiffs does make one useful point, to which I will return.

21    The only evidence adduced by Mr Balanian about the purpose of the communications listed in the schedules is what can be gleaned from the individual entries.

(a)    The file names are very brief and largely opaque (for example “Screenshot” or “missing images”). To the extent that some of them suggest the nature or contents of a document, they use words such as “transaction” or “balance”. I have not found anything in these entries that is suggestive of legal advice.

(b)    The “description” for every entry reads “email and email attachment between AB and his US attorney with teleconference notes as attachment”. (In many instances the final word of that description is missing but I assume this is a consequence of formatting.) This is uninformative as a description of subject matter and, if taken at face value, suggests an enormous number of telephone conferences between Mr Balanian and his US lawyer. If anything, the sheer number is suggestive of the conduct of a business undertaking rather than the obtaining of legal advice.

(c)    The asserted ground of privilege for every entry refers (mistakenly) to the Evidence Act and baldly asserts “Confidential communications and working papers prepared for the dominant purpose of obtaining legal advice and/or conducting litigation for Mr Balanian”. This states a conclusion rather than assisting with why the conclusion should be reached. It also suggests that the author of the schedules did not actually come to a view about the exact basis upon which privilege was to be asserted (ie, whether legal advice or pending litigation was the basis for the claim).

22    Even if these descriptions were more informative, Mr Balanian’s case would face further problems.

(a)    First, the affidavit does not make it clear who prepared the document descriptions in the entries in Annexure SS2. Accepting that hearsay may in some circumstances be relied upon (see Hastie Group Ltd (in Liq) v Moore [2016] NSWCA 305; 339 ALR 635 at [33] (Beazley P and Macfarlan JA)), Mr Scevola’s affidavit is nevertheless wholly lacking in detail as to what process was arrived at to reach the conclusion, in relation to every document in a long list, that it constituted email communications and was privileged.

(b)    Secondly, the documents tendered by the plaintiffs show that some, at least, of the documents listed in Annexure SS2 do not contain emails at all. That does not by itself establish that the documents do not attract privilege. However, it indicates that the list in Annexure SS2, to the extent that it purports to convey even a basic description about individual documents, cannot be taken at face value.

23    The evidence that Mr Balanian has adduced therefore does not establish the facts necessary to make out a claim for privilege.

24    There is a further reason why the interlocutory application must fail. The chronology outlined above indicates that the interlocutory application was not filed until after the orders of the Registrar had been entered (on 13 November 2025) and complied with (on 17 November 2025), with no step having been taken to seek to prevent disclosure of the documents on an interim basis. Indeed, the evidence of Mr Blackie indicates that the application was not served on the plaintiffs until 24 November 2025. Mr Balanian was clearly on notice at all times after the hearing on 30 October 2025 that disclosure was going to happen. He should therefore be taken to have acquiesced in the disclosure of the documents to the plaintiffs. For this reason, if any of the documents were shown to be privileged, I would hold that that privilege has been waived. Even if that conclusion is not correct, the fact that the plaintiffs have already been provided with the documents in accordance with orders of the Court means that some further order in addition to setting aside the orders made by the Registrar (eg requiring the plaintiffs to return the documents and potentially to take other steps as well) would be needed to protect Mr Balanian’s position. The interlocutory application as drafted lacks utility.

The return of the devices and ASIC’s application

25    The prayer seeking return of the electronic devices to Mr Balanian was not the subject of evidence from him and was not developed in written submissions. It was resisted by the plaintiffs and also by ASIC.

26    ASIC sought an abridgment of the time for service so as to allow its interlocutory process to be heard today. This was not opposed. By that interlocutory process, ASIC sought leave to be heard against the return of the electronic devices to Mr Balanian. Affidavit evidence read by counsel for ASIC revealed that the independent IT experts in this proceeding have so far been unable to extract data from some of the devices (which are locked); that ASIC has commenced an investigation into the affairs of the companies under s 13 of the Australian Securities and Investments Commission Act 2001 (Cth) (the ASIC Act) and for this purpose has attempted to conduct examinations of Mr Balanian; and that ASIC proposes in due course to issue a notice to the independent IT experts under s 33 of the ASIC Act requiring them to deliver the seized devices to it. The course that ASIC proposes to take — including further attempts to obtain data from the devices that are locked — would be frustrated by the return of the devices to Mr Balanian.

27    Counsel for Mr Balanian did not abandon the prayer seeking return of the devices but accepted that it was not supported by evidence and would not succeed in the light of the issues raised by ASIC. This aspect of the interlocutory application will therefore be dismissed.

28    Additionally, ASIC sought an order varying the undertaking given by the IT experts so as to remove any doubt as to whether they would be allowed to deliver the devices to ASIC pursuant to a notice under s 33. This order would in effect release the experts from their undertaking in so far as it might prevent them complying with such a notice. It was not opposed by any party and I will so order.

Disposition

29    Time for filing Mr Balanian’s interlocutory application should be extended to 21 November 2025. The application should be otherwise dismissed with costs and orders should be made in accordance with those proposed by ASIC in its interlocutory process

Associate:

Dated:    17 December 2025

SCHEDULE OF PARTIES