#JUDGMENT No. 26! IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) QLD G65 of 1986 GENERAL DIVISION } BETWEEN: KABWAND PTY. LTD. First Applicant AND: E.J.R. PASTORAL COMPANY PTY. LTD. Second Applicant AND: EDWARD PLANTAGENET SOMERSET AND ELSIE JOY SOMERSET Third Applicant AND: NATIONAL AUSTRALIA BANK LIMITED Respondent/Cross Claimant AND: KABWAND PTY. LTD. First Cross Respondent AND: EDWARD PLANTAGENET SOMERSET ANT) ELSTE_JOY SOMERSET Second Cross Respondent MINUTES OF ORDER JUDGE MAKING ORDER: PINCUS J. DATE OF ORDER: 16 SEPTEMBER 1987 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. The application for discovery be dismissed. 2. Costs be costs in the proceedings. 3. The matter be set down for trial by the Regi FEE Ta Cd oe, bead fol Settlement and entry of orders is dealt wi Order 36 of the Federal Court Rules. FEDRRA'. OC! TF , IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) QLD G65 of 1986 GENERAL DIVISION ) BETWEEN: KABWAND PTY. LTD. First Applicant AND: E.J.R. PASTORAL COMPANY PTY. LID. Second Applicant AND: EDWARD PLANTAGENET SOMERSET AND ELSIE Joy SOMERSET Third Applicant AND: NATIONAL AUSTRALIA BANK LIMITED Respondent/Cross Claimant AND: KABWAND PTY. LTD. First Cross Respondent AND: EDWARD PLANTAGENET SOMERSET AND ELSIE JOY SOMERSET Second Cross Respondent PINCUS J. 16 September 1987 EX _TEMPORE REASONS FOR JUDGMENT This is a dispute about discovery which raises an unusual point. A number of affidavits and lists of documents were made on behalf of the applicants, and the solicitors for the respondent sought inspection. On inspection, a number of documents were produced which were not in schedule 1 part 1, but in respect of which the instructions of the applicants' solicitors were to claim privilege and they had intended to do so. On 25 June 1987, the solicitors for the respondent wrote a letter to the solicitors for the applicants, referring to the inspection which had taken place, and asking for photocopies of certain documents. The letter also asked for certain documents not identified by numbers, including the documents which are presently in question. On 2 July, the solicitors for the applicants wrote back, claiming that the documents in question were irrelevant and/or the subject of legal professional privilege. The solicitors are not in agreement as to the facts in that the recollection of the solicitors for the applicants is that, at least as to some of the documents, the error was noticed at the time of ainspection and the documents withdrawn from inspection. The recollection of the solicitors for the respondent 1s different, and 1t has, in effect, been suggested that I might have to resolve that question by determining which recollection 1s correct, presumably after cross-examination. It seems to me that I should attempt to resolve it without taking that invidious course, and I have been much assisted by two recent authorities to which Mr. Morrison, for the respondent, has referred me. One of them is in Re _ Briamore Manufacturing Ltd (In Liquidation) (1986) 1 W.L.R. 1429. There, privileged documents were mistakenly included in schedule 1, part 1. It appears from p.1431F of the report that the solicitor who inspected them acquired knowledge of their contents and made some notes of what they said. Mr. Justice Hoffmann went on: "It is accepted that he could give secondary evidence of the contents of those documents, that he could produce the photocopy which he had made and that the liquidator could be cross-examined on them. That, onthe face of it, suggests that unless an order for the production of copies is made, the court will be in the position of receiving evidence about the contents of the documents, and being able to act upon that evidence but not have access to the best evidence, which is the documents themselves. That seems to me to be an illogical position. If the policy of the conduct of litigation requires that the privilege relating to those documents should be preserved, then 1t would seem that it should be right that nothing at all about the documents should be put before the court. On the other hand, if, as 18 conceded, secondary evidence 1S going to de admissible, there seems to me to be no logic in the court not seeing the documents themselves." Mr. Morrison suggests, 1n effect, that that case was approved by the English Court of Appeal in Guinness Peat Properties Ltd. v. Fitzroy Robinson Partnership (1987) 1 W.L.R. 1027. There are, however, two differences between those cases and the present. In the two English cases, Guinness Peat and Briamore, the inspection which took place was inspection of a document included in part 1, schedule 1. It appears from the Court of Appeal''s decision at p.1039E that the inspection which took place was thus, in each case, inspection in the course of discovery in the ordinary sense - that is, inspection of documents which were not the subject of any claim of privilege. - The second difference which is relevant 1s that it seems likely from what I have been told that in the Briamore Case there was more complete knowledge of the contents of the documents' than the solicitors for the applicant appear to have here; in particular, there is no suggestion here that any photocopy was made. In the Guinness Peat Case, there was a review of the authorities, apparently mainly in response toa suggestion that the Briamore decision was inconsistent with previous authorities in which similar incidents had produced an opposite result. It is unnecessary, however, to attempt the task (not, on its face, very easy) of reconciling Hoffmann J.'s decision with the case of Lord Ashburton v. Pape (1913) 2 Ch.D. 469, dealt with by the Court of Appeal at pp.1040 and 1041. The Guinness Peat Case, as 1t seems to me, 1s authority for the proposition that even if some knowledge of the contents of the documents in question has been acquired, there are, nevertheless, two exceptions which equity can recognize, namely fraud and obvious mistake. There is no suggestion here of fraud, nor, having inspected the documents, having regard to the circumstances, could I hold that there was an obvious mistake, and I am not satisfied that Mr. Gallagher, the respondent's solicitor who made the inspection, must have realized that the documents were produced by mistake. The question, therefore, seems to be one which igs not covered by either of these authorities. Mr. Morrison says, in effect, that it is, and that the Guiness Peat Case suggests that 1t does not really make any difference whether inspection 1s of documents 1n respect of which the obligation to produce has already been conceded. He refers to the fact that, for example, in the English and American Insurance Co. Case (1987) 137 N.L.d. 148, referred to at p.1042 of Guinness Peat, discovery was apparently made by simply producing a bundle of papers. However, the actual result does not seem to be of any assistance to Mr. Morrison and, putting it simply, his side lost that case. Approaching the matter, as I think I have to, as a question of principle, I am satisfied that there was a production of documents for which privilege had been claimed, that the production occurred by mistake, and that although the solicitors for the applicant have acquired some knowledge of the contents, that knowledge 1s by no means complete. The essential question is, does production by mistake waive the privilege? My view 1s that it depends upon the circumstances. The privilege will no longer be protected, I should think, if it has lost its points - that is, if such complete knowledge has been obtained as to make it futile to attempt to preserve 1t. That is not this case. Here, as Mr. White for the applicants correctly says, the way in which the application has been pressed shows that there '4 is no futility. To the extent that knowledge has been acquired of the privileged documents, privilege has been waived, and nothing can be done about that. What the respondent seeks is something further; it seeks copies of the documents. I see no unfairness in refusing that. The order sought seems to me to be discretionary, and I propose to refuse it on the ground that the documents for which privilege has been claimed may still be the subject of protection by the Court. I will therefore not order inspection of the documents which are referred to in the second paragraph 3 on page 3 of the affidavit of Mr. A.M. Gallagher which has been filed herein on 14 September 1987. I make the costs of today costs in the proceedings and I direct that the case be set down for trial by the Registrar, and dispense with the necessity of his ascertaining its state of readiness, because I accept counsels' assurances on that. " rort fy that this and the 5 preceding vayes are a true copy of the reasons for yvag 0 -. ferein of His Honour '* 5° ce Pincus Wettbert Associate Dated [6 Septembcs IG¢ 7