Building Insurers' Guarantee Corp v A&MI Hanson Pty Ltd & Ors

HIS HONOUR : Until the first defendant went into liquidation, Colin Biggers & Paisley acted for it. Following its liquidation, the plaintiff issued a subpoena for production addressed to its liquidator, which produced only a few documents. The plaintiff then issued a subpoena to Colin Biggers & Paisley for production of essentially the same documents which had originally been sought from the liquidator. Colin Biggers & Paisley answered that subpoena and produced documents to the Court, but made a claim for privilege in respect of all of those documents. The documents produced may be described as (1) letters from the first defendant to Colin Biggers & Paisley and (2) documents - generally speaking, copies of original documents - which accompanied those letters.

I have granted access to many, but not all, of the documents in the second category, being attachments and enclosures which accompanied the letters. I have not done so in two cases, where it seems to me that the copy documents are so intertwined with material prepared for the defence of the proceedings, that they ought properly be covered by the claim for privilege based on Evidence Act 1995 (NSW), s 119 (Litigation Privilege). But, generally speaking, where a non-privileged document is communicated to a lawyer, even for the dominant purpose for obtaining advice on that document or for further litigation, that document obtains no immunity or privilege by that delivery.

I accept Ms Zrno's proposition that it is prudent for a lawyer in the position of Colin Biggers & Paisley, their client having gone into liquidation and the liquidator's position being unclear, to make a claim for privilege, so far as such a claim appears reasonable in the circumstances. I should also mention that I think Colin Biggers & Paisley have entirely properly informed the liquidator, first, of receipt of the subpoena and, secondly, of the Notice of Motion for access; and reminded the liquidator that if he wishes to maintain a claim for privilege, it would be necessary for him to appear and argue it. The liquidator has not done so but, in his absence, Colin Biggers & Paisley have. It must be said that they have joined in a request that the Court inspect the documents and rule on them; and they have not resisted the application for access, save to ask the Court to consider and rule on the documents.

I have come to the view - because of the nature of the documents which accompanied many of the letters from the first defendant to Colin Biggers & Paisley - that there was no legitimate claim for privilege in respect of much of the material for which such a claim was made. I need to bear in mind that I am dealing with this motion, not as a motion for a special costs order in the summary or supervisory jurisdiction against solicitors, but simply on an application on a Notice of Motion in connection with a subpoena. I think I must overlook the circumstance that in this case it is a firm of solicitors who are the respondents to that subpoena. In making a claim for privilege, they take the same risks as any other respondent to a subpoena does. Their "blanket" claim for privilege necessitated an application by the plaintiff for access, which has succeeded. Because I think that in almost every respect Colin Biggers & Paisley has acted prudently and properly in dealing with this issue in the relatively difficult circumstances that have prevailed, it is with great reluctance that I feel compelled to come to the conclusion, nonetheless, that having made an unsustainable claim for privilege in respect of a large part of the documents, they must pay the plaintiff's costs of this motion.

Accordingly, I order that the respondent Colin Biggers & Paisley Solicitors pay the applicant/plaintiff's costs of the motion filed on 28 March 2006.

The fifth cross-defendant also applies for costs of the motion. The fifth cross-defendant did not participate in the privilege argument, but sought first access, in order to enable it to ascertain if it has a claim for privilege in respect of any documents. As has appeared in the course of the discussion, I have the gravest doubt that there is any conceivable basis on which the fifth cross-defendant could make a sustainable claim for privilege. I do not consider Colin Biggers & Paisley are responsible for any costs the fifth cross-defendant incurred in respect of this motion, and I decline to make any order for costs of the fifth cross-defendant.