Federal Court of Australia

Zulic v CMC Markets Asia Pacific Pty Ltd (No 4) [2026] FCA 878

ORDERS

THE COURT ORDERS THAT:

1.    The interlocutory application dated 7 July 2026 be dismissed.

2.    The documents sought under the Notice to Produce issued by the Applicants on 18 June 2026 are not required to be produced.

3.    The Applicants pay the Respondent’s costs in relation to the Notice to Produce, including today’s hearing.

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

JACKMAN J:

1    The present dispute concerns an issue of legal professional privilege arising from a notice to produce issued by the applicants to the respondent (CMC) dated 18 June 2026, requiring production of 17 invoices for the period 1 October 2024 to 28 February 2026. The invoices record the costs incurred by CMC referred to in certain paragraphs of an affidavit of Ms Farrant of Baker McKenzie of 26 May 2026, filed for CMC in support of an application for an additional amount of security for costs which is fixed for hearing on 20 July 2026. An interlocutory application was handed up in court today which also seeks by way of alternative order that the invoices be produced subject to redactions for claims of legal professional privilege.

2    The additional security sought by CMC is in an amount of about $8.6 million, being in addition to more than $4.6 million in security already provided by the applicants. The applicants submit that the total of over $13.2 million is without precedent in any decided cases. The applicants seek to test the reasonableness of figures relied on by CMC for costs already incurred by CMC in the proceeding.

3    CMC has disclosed the first page of each of the invoices, disclosing the total amount charged for the period in question. The applicants have filed evidence of a costs consultant, Ms Rosati, who says she is unable to assess the reasonableness of CMC’s past costs without access to the invoices, showing the narrations for work undertaken.

4    There is a dispute between the parties as to whether it is usual practice in seeking security for large amounts of past costs to provide copies of redacted invoices to support the claim for security. It is not necessary for me to decide that issue, as I regard the present dispute as one of principle concerning legal professional privilege, rather than one governed by the usual practice of solicitors. Nor is it necessary for me to decide whether CMC has acted reasonably in claiming legal professional privilege, in response to various proposals propounded by the applicants to resolve the issue. The question is simply whether the relevant material in the invoices is privileged.

5    The evidence in support of CMC’s claim for privilege is in the affidavit of Mr McCredie of Baker McKenzie of 2 July 2026. He says the following in [17], noting that Ms Farrant is currently on leave:

17    I am informed by Ms Farrant and believe that:

(a)    the narratives in the Invoices contain detailed records of the work undertaken by each fee earner on each day the subject of the Invoice. In particular, the entries include records of:

i.    the date which work was performed;

ii.    the nature of the work being performed on each day;

iii.     the date of meetings with the client, counsel and potential witnesses, and the subject of those meetings; and

iv.    the actions being taken in response to developments in the litigation, including research being undertaken, advice sought from counsel, or instructions from the client;

(b)    even where the narratives do not, themselves, reproduce the content of confidential privileged communications, the nature and content of the work that is being undertaken on behalf of the client, including advice that is being sought and given, in connection with the proceeding may be able to be inferred when the entries are read together and in sequence;

(c)    Ms Farrant is also aware from a high-level review of the Invoices that there are individual narratives that will, on their own, disclose the issues being discussed in privileged communications for the dominant purpose of giving legal advice in relation to this proceeding. Even if it were possible to redact those particular entries to avoid disclosure of privileged communications, the nature of time entries is that each individual fee earner does not write time entries in an identical way. This means that it is not possible to simply run search terms to identify potentially privileged information and redact responsive entries. All of the narratives would need to be reviewed by a senior member of the team particularly given that the proceedings are still on foot and the potential detriment that would be caused to the Respondent if privileged information was inadvertently provided to the Applicants. As she stated in her May 2026 Affidavit, this would not be a straightforward process.

6    Neither party submits that it is necessary or desirable for me to examine the invoices themselves. In circumstances where, as the docket judge, I am expected to hear the application for additional security and the trial itself, and the parties have requested that I deal with this privilege dispute myself, I do not regard it as appropriate to examine the invoices.

7    It is well established that legal professional privilege may be availed of by a person to resist the giving of information or the production of documents which would reveal the communications between a client and his or her lawyer made for the dominant purpose of giving or obtaining legal advice or the provision of legal services: Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; (2002) 213 CLR 543 at [9] (Gleeson CJ, Gaudron, Gummow and Hayne JJ). The privilege is available where the content or nature of the privileged communication may be inferred from the document, even if not expressly revealed by it, such as in a solicitor’s bill of costs: Commissioner of Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3; (1997) 188 CLR 501 at 569 (Gummow J). Whether a solicitor’s invoice falls within that category depends on the circumstances, particularly the details of the entries made in the invoice. It has been said that a useful guide in determining whether the invoice would reveal privileged communications will often be whether disclosure of the invoice would be tantamount to waving privilege in the underlying communications with which the invoice expressly or impliedly deals: Carey v Korda [2012] WASCA 228; (2012) 45 WAR 181 at [66] (Murphy JA, with whom Martin CJ and Newnes JA agreed). That would typically be the case where the invoice recites the nature of the professional services rendered in a way which shows the nature of the instructions or the advice. Further, as Murphy JA said at [68], even if none of the individual entries in an invoice might itself reveal directly or indirectly the content or nature of legal advice given or received, the entries might, when read together and in sequence, enable an inference to be drawn as to the nature or content of some privileged communication. However, as Murphy JA said at [69]–[71], it is not sufficient for the party claiming privilege merely to assert that the documents are privileged or to resort to a verbal formula.

8    Mr McCredie’s evidence was given on information and belief from Ms Farrant, but I do not regard that as objectionable or as materially diminishing its weight. It reflects a genuine engagement by Ms Farrant with the contents of the invoices over which privilege is claimed. It is true that Ms Farrant’s review is described as “high level” in [17(c)] of Mr McCredie’s affidavit, but that in my view does not establish that that was inadequate in the circumstances to substantiate the claim for privilege. As the solicitor on the record for CMC, it is likely that Mr Farrant was familiar with the detail of the invoices from the time that they were composed and sent to CMC. The fact that Ms Castiglia of Baker McKenzie did not undertake a review of the individual time entries or narratives within the body of the invoices (see Mr McCredie’s affidavit at [18]) does not mean that Ms Farrant did not do so sufficiently for the purposes of providing the information to Mr McCredie of which he gives evidence in his affidavit at [17].

9    I do not read the last two sentences of [17] of Mr McCredie’s affidavit as simply a claim that the task of redacting particular entries would be unduly burdensome or even oppressive. The opening words, “Even if it were possible redact those particular entries to avoid disclosure of privileged communications”, indicate in the context of [17] as a whole, that Ms Farrant does not regard that task as possible.

10    The applicants contend that the limited information in Ms Farrant’s affidavit indicates that the claim for past costs is excessive, for example by reason of CMC’s legal team being top-heavy. That is an argument that can be made at the hearing on 20 July 2026 from the material that is available to the applicants and their expert solicitors and cost consultants.

11    In all the circumstances, I regard Mr McCredie’s evidence as sufficient to substantiate the claims for privilege that have been made. Accordingly, CMC is entitled to resist production of the 17 invoices in question, other than the front page of each of those invoices which has already been produced.

Associate:

Dated:    7 July 2025