Hall v Hall

This is a motion for review of a decision of a registrar which, in effect, upheld a notice to produce for inspection issued by the defendant to the plaintiff. The plaintiff (the applicant on the motion for review) was represented Ms R Francois of Counsel with Ms H Robinson of Counsel. Mr J Brown of Counsel appeared with Mr R Size of Counsel for the defendant.

The plaintiff and defendant are brothers. By his will, their late father, Marshall John Hall, established the MJ Hall Testamentary Trust (the Trust). The defendant is the trustee of the Trust. In these proceedings, the plaintiff seeks the removal of his brother as trustee, to be replaced by two independent trustees. The plaintiff's solicitor is Ms Snezana Vojvodic, a partner in Brown Wright Stein Lawyers.

The plaintiff's case in chief is sought to be established by reference to the defendant’s conduct as trustee, which is said to be evidenced by correspondence between the parties and their respective solicitors. That is not an uncommon course in cases such as this.

On 17 May 2022, Ms Vojvodic swore an affidavit (the First Affidavit) attaching the correspondence to be relied upon by the plaintiff and which included:

The defendant contends that for the purpose of "testing" Ms Vojvodic's evidence, paragraph 2 of the First Affidavit and the fact that the plaintiff seeks to prove his case through Ms Vojvodic's affidavit gives rise to an entitlement as a matter of procedural fairness to access to the file to which she refers (I shall refer to it as the File). It is also said that paragraph 2 impliedly waives client legal privilege over anything in the File which might otherwise be subject to that privilege.

The defendant sought to make good this alleged entitlement by issuing a notice to produce for the File and then a motion for compliance with that notice. After a contested hearing, the registrar ordered that the plaintiff should comply with the notice to produce. The plaintiff has sought a review of that decision.

For the reasons which follow, the Court will set aside the learned registrar's orders. However, consistent with the overriding purpose, the Court will order production of a more refined category of documents to which it is satisfied (and the plaintiff does not dispute) the defendant is entitled.

There were three matters of agreement on the review:

The proceedings were originally commenced by summons filed on 18 May 2022. The First Affidavit was filed and served in support of the summons. A statement of claim was filed on 14 November 2022 and seeks relief including:

Because of its importance to the resolution of the issues on this review, it is necessary to say something in detail about the structure and content of the First Affidavit. For convenience, I reproduce again paragraph 2 of that affidavit:

There is then a section entitled "Background" which sets out by way of overview a number of basal facts which, with one exception, it is difficult to see how they could be matters of contest. The exception is paragraph 12 which states:

According to Mr Brown, there is a dispute which the defendant wishes to test about the matter referred to in paragraph 12(b).

The First Affidavit then has a section headed "Correspondence Between the Parties". This commences with the chapeau:

There are then listed fifty-eight items of correspondence which are exhibited in a folder to the First Affidavit.

After the list of documents, there follows what might be described as an overview or description from the point of view of the plaintiff of what that correspondence shows. This includes the following statements:

After the summary of a great deal of correspondence, the First Affidavit concludes with a section headed "Removal of Defendant As Trustee" which includes:

The circumstances of the creation of the First Affidavit were the subject of further evidence from Ms Vojvodic in an affidavit affirmed on 29 June 2023 (the Second Affidavit) in support of the present motion for review. This included:

I also granted leave to Mr Brown for limited cross-examination of Ms Vojvodic in relation to the creation of the First Affidavit. The effect of the evidence that she gave in cross-examination was that the File is large (although there is no evidence before me of how big it is beyond that it contains correspondence and other material going back over a large number of years) and is in part electronic, and in part paper.

Ms Vojvodic explained that she instructed an assistant solicitor in her office to conduct a preliminary view of correspondence in the File which would be used as evidence in the proceedings, and that she (Ms Vojvodic) then reviewed the correspondence that had been selected to come to a final view as to what would be included in the First Affidavit.

She accepted that the universe of documents which she reviewed were those referred to in paragraph 6 of the Second Affidavit (see [16] above) and that she did not review the documents referred to in paragraph 7 of that affidavit.

Finally in relation to the First Affidavit, Ms Francois told me that it was no longer proposed to read the First Affidavit at the final hearing. Instead, the specific correspondence upon which the plaintiff proposed to rely would be tendered. While that may be so, to the extent that the filing and service of the First Affidavit has any of the consequences contended for by Mr Brown, the fact that it is no longer to be read makes no difference. Ms Francois did not suggest otherwise.

By his solicitor, the defendant issued a notice to produce dated 2 November 2022 to the plaintiff (the Notice) which sought:

The plaintiff did not comply with the Notice. It is not necessary to record the correspondence that passed between the parties on what became the neuralgic question of whether or not there should be any compliance with the Notice.

On 15 February 2023, the defendant filed a notice of motion for relief including:

The defendant’s motion was heard by the registrar on 12 May 2023. The registrar delivered her decision on 21 June 2023, with an immaterially revised version of the judgment being published on 29 June 2023. The registrar made these orders:

The registrar's reasons record that the plaintiff objected to compliance with the Notice on the basis that first, the File was privileged; second, that the Notice was too broad because the whole File could not be relevant to the issues in the proceedings; and third, that the Notice was an impermissible substitute for discovery.

The defendant submitted before the registrar that as a matter of procedural fairness he was entitled to test the evidence given by Ms Vojvodic in the First Affidavit, and insofar as there was any privileged matter in the File, it had been impliedly waived by paragraph 2 of the First Affidavit and the fact that the plaintiff proposed to prove his case solely through Ms Vojvodic's evidence.

The registrar identified the relevant principles as those set out by the Court of Appeal in GR Capital Group Pty Ltd v Xinfeng Australia International Investment Pty Ltd [2020] NSWCA 266, in particular this summary of the authorities by Macfarlan JA:

The registrar accepted Mr Brown’s submission that by deploying the First Affidavit and its contents in the way in which the plaintiff had, and proposed to do, the plaintiff had "laid open the communications to scrutiny" that were referred to in the File and the File itself. The registrar accepted that this was more than a mere reference to something that might otherwise have no effect on, for example, a privilege claim.

Insofar as the registrar rejected the plaintiff's argument concerning the irrelevance of the File, she noted that the difficulty was that in circumstances where the plaintiff had apparently "based their whole case on the file, and by inference, they must have considered the whole file relevant" (registrar's decision at [32]).

Finally, for similar reasons, the registrar was of the view that the Notice was not an abuse of process as an improper attempt to obtain discovery by some other means.

Although developed in greater detail, I intend no disrespect to the industry of counsel in recording that the parties' respective arguments on the review remained essentially the same as those put to the registrar.

Ms Francois submitted that the File was privileged and much of its content was necessarily irrelevant.

Mr Brown submitted that the whole of the File had been “laid open to scrutiny” by the First Affidavit, especially by the express reference to it in paragraph 2.

Furthermore, he submitted that insofar as the plaintiff might contend that there was privileged material in the File, the plaintiff had failed to file any evidence to make good the claim for privilege in relation to particular documents. For this submission he relied on the decision of the Court of Appeal in Hastie Group Limited (in liq) v Moore (2016) 339 ALR 635; [2016] NSWCA 305:

To this last submission, Ms Francois responded that it was open to the plaintiff to demonstrate that the documents were the subject of privilege by reference to their nature as documents on a solicitor's file (see Young J (as his Honour then was) in AWB Ltd quoted in [34] above).

In my respectful view, a fundamental difficulty with the way in which the argument was conducted both before the registrar and before me has been the undifferentiated treatment of "the File". In one sense, that is understandable given Ms Vojvodic's reference in the First Affidavit to "the file". Nevertheless, Mr Brown quite properly accepted that the File would necessarily contain things that were completely irrelevant to the matters in issue, such as costs agreements and invoices.

For her part, Ms Francois candidly accepted that not all the contents of the File could possibly be privileged: for example, correspondence between the solicitors for the parties or file notes recording instructions given by the plaintiff to his solicitors that were then expressly referred to in the First Affidavit (see [14] above).

Notwithstanding these entirely sensible concessions on each side, it is also necessary to record that at every turn when I pressed Mr Brown to be precise about what it was his client was actually seeking from the File, his answer was that his client was entitled, for the reasons he advanced, to the whole File.

As the argument developed, it reduced to a debate about those documents that were subject to client legal privilege on the File. Ms Francois accepted that all of the correspondence on the File that was between the plaintiff and the defendant themselves or their respective solicitors could not be the subject of privilege (there being no point taken that a copy of a document on the file had been produced for a purpose that made the copy privileged).

What the parties ultimately recognised as being at the heart of their dispute were documents that could be the subject of client legal privilege including, in particular, according to Mr Brown, those advices or records of instructions referred to in paragraph 7 of the Second Affidavit (see [16] above). Mr Brown contended that insofar as such documents existed, they must have formed part of the information or knowledge to which Ms Vojvodic referred as being the basis of the evidence that she gave in her First Affidavit.

The fundamental difficulty with Mr Brown's submissions is that, in my respectful opinion, paragraph 2 of the First Affidavit does not in and of itself constitute an express or implied waiver of client legal privilege of any documents that may be contained in the File. Paragraph 2 cannot, and should not, be read in isolation from the rest of the First Affidavit, and an inquiry must be conducted as to what has actually been deployed, and how, in the First Affidavit.

The Court accepts, for example, Ms Francois' submission relying upon the decision of Rolfe J in Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1996) 40 NSWLR 12 that for the purposes of disclosing advice so as to lose the benefit of privilege, what must be disclosed is a statement of the advice or its substance or effect. Mr Brown fairly conceded that if one looked beyond paragraph 2 of the First Affidavit, there was no reference anywhere in the First Affidavit to any advice or even the substance of any particular piece of advice.

In most cases, the proper response for a party in the position of the plaintiff seeking to rely on a claim of client legal privilege would be to provide affidavit evidence of the kind identified by Brereton J, as his Honour then was, in Hancock (quoted in [34] above). However, in circumstances where the plaintiff was confronted by a request for the entirety of a solicitor's file, and given the nature of the issues in this case, I accept Ms Francois' submission that her client could discharge the obligation to demonstrate privilege "by reference to the nature of the documents supported by argument or submissions" (relying on the dicta of Young J in AWB Ltd (also quoted in [34] above)).

Paragraph 7 of the Second Affidavit clearly identifies as a category advices and other communications that would be subject to client legal privilege. It is sufficient for present purposes for the Court to find, as it does, based on that paragraph that the File must contain such material. The question, when faced with an undifferentiated request for an entire file, then becomes to consider, by reference to the terms of the First Affidavit itself, in what communications and advices might privilege have been waived. That was not a course with which Ms Francois cavilled. She accepted that privilege must have been waived in file notes and other records of communications between the plaintiff and his solicitor which have subsequently been referred to as matters of instruction or information provided by the plaintiff to Ms Vojvodic in the First Affidavit (see [14] above).

Starting with the simple proposition that even the defendant accepted that there was going to be irrelevant material in the File, it follows that the defendant was never entitled to the File in its entirety. It is unfortunate that the defendant made no attempt to specify the documents that were sought from the File. That could have been easily done by a close examination of the terms of the First Affidavit itself and then either by exclusion of plainly irrelevant material, or by express inclusion by reference to the issues in the case and the evidence. The requirement in s 56 of the Civil Procedure Act 2005 (NSW) to focus upon the just, quick and cheap resolution of the issues generally in dispute required such an approach. While the First Affidavit does refer to the File, when paragraph 2 is read in its terms and in the context of the entire affidavit, the Court cannot accept the submission that paragraph 2 gave the defendants an entitlement to access to the entire File.

For these reasons, the Court will set aside the orders made by the registrar. Nevertheless, again having regard to s 56, it is plain that the parties accept that there are certain categories of documents from the File to which the defendant is entitled and which could properly have been sought arising from the filing and service of the First Affidavit. Therefore, the Court will make orders to progress matters by requiring the production of those documents.

Ms Francois sought her client's costs both of the proceedings before the registrar and of the review today on the basis that her client has succeeded as to both, and costs should follow the event.

Mr Size submitted that in essence the Court has heard two separate proceedings. In the proceedings before the registrar, the defendant was successful on the material then before the registrar. He submitted that because, for example, the Court has today had the advantage of the Second Affidavit, and a better understanding of the process of how the First Affidavit was prepared and the contents of the File, today has gone off on a sufficiently different basis that the Court should not disturb the costs outcome before the registrar.

I do not accept Mr Size's submission. The question before the registrar was whether or not the defendant was entitled to production of, and access to, the File pursuant to the Notice. I have come to the view, for the reasons set out above, that the registrar erred to order compliance with the Notice. In those circumstances, costs should follow the event below as it should have been, namely that the defendants should pay the plaintiff's costs of the proceedings before the registrar.

Turning to the costs of the review, again the starting point is that costs should follow the event. However, Mr Size submitted that costs should be in the cause because the Court had decided to order the production of a limited class of documents by the plaintiff.

There are two connected difficulties with that argument. First, insofar as the Court is ordering the production of a limited class of documents, there was no resistance from the plaintiff when the Court observed that those documents seemed to be documents about which there could not possibly be any argument as to the obligation to produce them as a subset of the File. Related to that was the fact that on each occasion that the Court had sought, during the course of argument, to invite the defendant to narrow the categories of documents sought, the defendant maintained the position that on his case he was entitled to the entire File. The outcome today is that, on any view, the defendant was not entitled to the entire File.

For these reasons, the matters advanced by Mr Size in relation to the costs of the review are insufficient for the Court to exercise its discretion to displace the general principle that costs should follow the event, in this case being the granting of the relief sought in the plaintiff’s notice of motion for review that the learned registrar’s orders should be set aside.

One other argument as to costs was raised at the conclusion of the hearing. Ms Francois submitted that the defendant should not be entitled to indemnity from the Trust for his costs both of the proceedings before the registrar and of the review before me today, and for those costs he has been ordered to pay.

In my respectful view, the just determination of that question will require an examination of the defendant's conduct of the entirety of the litigation, of which the hearing before the registrar and of the review will, it appears, form but a small part. It would be necessary for any judge considering the question of the defendant’s entitlement to indemnity from the Trust to have a much deeper understanding of the issues between the parties than I do, and knowledge of the ultimate outcome of the litigation, in order to come to a fair assessment of whether or not the defendant was entitled to indemnity from the Trust, or whether he was acting in self-interest as opposed to acting in the interests of the Trust as trustee.

At the conclusion of this aspect of the argument, Ms Francois accepted that, for the reasons I have just given, it was appropriate that I should not embark upon a determination of the issue of the defendant’s entitlement to indemnity. Against the possibility that issue may be agitated later, I will formally reserve it for determination by the trial judge.