Sargent v Sargent

During the course of hearing a notice of motion which was ultimately settled by consent, the Court also dealt with claims of client legal privilege raised by the defendant to resist access being granted to the plaintiff to two documents produced by the defendant in answer to a notice to produce issued by the plaintiff (referred to as Documents A and B). The Court rejected the claim for privilege in Document A and granted access to the plaintiff. As to Document B, the privilege claim was upheld and access refused. These are the reasons for those rulings.

Without disrespect, I will refer to the parties by their given names. Mr T Rollo of Counsel appeared for the plaintiff, Darren. Mr D Liebhold of Counsel appeared with Mr N Condylis of Counsel for the defendant, Craig. The argument for Craig on the privilege claim was conducted by Mr Condylis.

Darren and Craig are brothers. Their late parents were Barbara and John. John died in 2016 and Craig and Darren are the surviving executors of his estate. Barbara died in in 2021 and Craig is the executor of Barbara’s estate.

These proceedings relate to the ownership of a substantial group of businesses known as the “Sargent Group”. Darren sues Craig in the latter’s capacity as the executor of Barbara’s estate. His claims include:

It will be apparent from even the most general overview in the proceedings that Barbara’s testamentary intentions from time to time will be facts in issue or at least relevant to other facts in issue.

The privilege dispute arises in relation to two documents produced in answer to a notice to produce on behalf of Darren which sought:

Walsh & Blair Lawyers were Barbara’s solicitors at the relevant time. Ms C V O’Mahony of Walsh & Blair Lawyers is the solicitor on the record in these proceedings for Craig.

Craig’s claim for privilege in relation to documents A and B turned upon the application of section 121(1) of the Evidence Act 1995 (NSW) (the Act), which is set out in what follows.

There was no dispute that the claims for privilege should be determined by reference to the Act: Singtel Optus Pty Ltd v Weston (2011) 81 NSWLR 526; [2011] NSWSC 1083.

The relevant provisions of the Act are:

Section 121(1) has been considered by White J (as his Honour then was) in d’Apice v Gutkovich - State of Abraham (No 1) [2010] NSWSC 1336 (emphases added):

In relying on d’Apice, I do not overlook that in Singtel, White J resiled from the view he expressed in d’Apice that a dispute of the present kind was to be decided under the common law. However, his Honour did not resile from the views he expressed in d’Apice concerning s 121(1). For the reasons given by his Honour in d’Apice, I respectfully agree with and apply his Honour’s conclusions on the proper construction of s 121(1).

Document A

Ms O’Mahony swore an affidavit in support of Craig’s privilege claim as to both documents. Her evidence was that on 29 March 2021 a solicitor in the employ of Walsh & Blair Lawyers (not being Ms O’Mahony) provided legal advice in conference to Barbara (the March 2021 conference). Barbara died approximately four months later. These proceedings were commenced by summons filed on 8 July 2022.

As to Document A, Ms O’Mahony deposed:

I was of the view that while it did so in a somewhat roundabout or inferential fashion, Ms O’Mahony’s affidavit proved that in relation to Document A, Barbara was the client; the document was a privileged record of the March 2021 conference; and, the privilege was Barbara’s. Based upon those findings it was also clear that the right to assert the privilege had now passed to Craig as Barbara’s executor.

Mr Condylis informed the Court that Document A had been produced in answer to Darren’s notice to produce “out of an abundance of caution”. Having inspected Document A, I can say that caution was well-founded.

Mr Rollo submitted that even if privilege had been made out (a proposition he disputed), that privilege had been lost by reason of s 121(1). The document had been produced in answer to a notice which called for documents “recording any expression of [Barbara’s] intentions” as to her wills and that she was a “client or party who has died” within the meaning of s 121(1). I accept that submission insofar as it describes Barbara as a “client who has died”. I do not accept the implicit submission that Barbara is also a party to the present proceedings through her executor who is a party (see further [27] below). However, nothing turns on that. I also accept Mr Rollo’s submission that nothing in Ms O’Mahoney’s affidavit detracts from the conclusion that Barbara was a “client who has died”.

Over Mr Rollo’s objection, I accepted Mr Condylis’ invitation that the Court should exercise its power under s 133 of the Act to inspect Document A, because Mr Condylis’ argument depended upon the Court inspecting the file note to read what was written there. The point upon which he relied could not otherwise be made in a way that would preserve the privilege being claimed.

I inspected the file note on the first page of Document A (being “the hand-written marks and writing including "29/3/21”” referred to by Ms O’Mahony). The final line of the file note recorded what Mr Condylis submitted were not Barbara’s “intentions” for the purpose of s 121(1), but rather it recorded what he described as “the outcome of the conference”. I did not accept that submission because while it may be correct to say that the words describe the outcome of the conference, that outcome says something about her testamentary intentions in a way which is “relevant to a question concerning” her intentions within the meaning of s 121(1).

Although Mr Rollo did not put it this way, to adopt the language of White J, s 121(1) abrogated the claim for privilege which Barbara as a client could have maintained but for her death where Document A was relevant to Barbara’s intentions. Accordingly, the Court was satisfied that the privilege (being Barbara’s) had been lost pursuant to s 121(1) of the Act such that Darren was entitled to inspect Document A.

The circumstances in which Document B came into existence are quite different from the circumstances of Document A. As to Document B, Ms O’Mahony deposed:

I was satisfied from the affidavit evidence alone that Document B, having been brought into existence both after Barbara’s death and after the commencement of the present proceedings (8 July 2022), was a note prepared for the purposes of this litigation in the nature of a witness statement provided by the solicitor who had attended on Barbara in the March 2021 conference and recording that solicitor’s recollection of what had transpired at that conference.

I would have reached the conclusion to which I came about Document B without any further evidence or the benefit of inspecting Document B (which, again, I did and which only served to confirm the conclusion to which I had already come about the purpose of Document B). However, over Mr Rollo’s objection, I granted Mr Condylis leave to adduce further brief oral evidence by AVL from Ms O’Mahony from her office in country New South Wales. That evidence was (Tcpt, 31 August 2023, p 33(32-37)):

Having heard that evidence, Mr Rollo, correctly in my respectful view, accepted that there could be no question that Document B was privileged. Nor was there any dispute that, at least, the privilege in Document B was Craig’s in his capacity as Barbara’s executor and a party to these proceedings. No other conclusion could be possible, given that Barbara was dead at the time Document B was brought into existence. The essential dispute between the parties in relation to Document B turned on what was to be made of Craig’s status as Barbara’s executor.

Mr Condylis submitted that Document B fell precisely within the class of documents identified by White J in d’Apice at [17] (see [11] above). The privilege in Document B was Craig’s privilege in his role as executor of the estate and was a claim for privilege that an executor “… has in his or her own right where the privileged documents or communications are relevant to the intentions or competence of the deceased” which White J held was a claim for privilege not abrogated by s 121(1).

Mr Rollo submitted on behalf of Darren that Craig’s privilege in Document B was abrogated by s 121(1) because Craig was “standing in the shoes” of Barbara. In his submission, Barbara was both the client claiming the privilege, and a party to proceedings who has died, by virtue of Craig being her executor, such that both limbs of s 121(1) were satisfied.

Mr Condylis’ submission is correct and the Court accepted it accordingly. Mr Rollo’s submission involves an impermissible blurring of the separate legal personalities of Barbara, and of Craig as her executor. Being an executor or administrator is an office which carries its own rights and duties that are personal to the holder of that office. Those rights and duties, and that person, are quite distinct from the legal personality of the deceased, whose demise is the obviously essential prerequisite for the assumption by the administrator or executor of their office.

The privilege in Document B belongs to Craig as the client for whom Document B was brought into existence for the purposes of these proceedings. It is not privilege in a communication which existed during Barbara’s lifetime in the sense that she would have been able to assert that claim, a right which had then passed to Craig as her executor (as was the case with Document A). To accept Mr Rollo’s “standing in the shoes” submission would be to precipitate precisely the unreasonable consequence identified by White J in d’Apice at [19] (see [11] above).

For these reasons, the Court determined that s 121(1) did not abrogate Craig’s privilege in Document B and Darren was not entitled to have access to that document.

The various orders to give effect to these reasons were made at the conclusion of the hearing, including as to costs. The parties agreed that these reasons could be published electronically.

At the conclusion of the hearing, the Court acceded to Mr Condylis’ application that the order for access to document A should be stayed until 14 days after the date of delivery of these reasons or further order. Given the publication of these reasons, and for the avoidance of doubt, I will vary that order now to give the parties the benefit of a specific terminal date. The Court’s orders are: