FEDERAL COURT OF AUSTRALIA Temwell Pty Ltd v DKGR Holdings Pty Ltd [2003] FCA 1001 TEMWELL PTY LTD (ACN 082 656 157) -v- DKGR HOLDINGS PTY LTD (formerly known as DYNAMIC DATA SYSTEMS PTY LTD) (In Liquidation) (ACN 062 778 616), mCOM SOLUTIONS INC, DRAGON VENTURES. COM INC, mCOM SOLUTIONS AUSTRALIA PTY LTD (In Liquidation) (ACN 091 375 950), DAVID HAINS, ROBERT VAN ZANTEN, DRAGONVENTURES.COM LTD, RICHARD HAINS and IAN MORRIS KIEFEL AND mCOM SOLUTIONS INC. and mCOM SOLUTIONS AUSTRALIA PTY LTD (In Liquidation) (ACN 091 375 950) v TEMWELL PTY LTD (ACN 082 656 157), SLADEMERE PTY LTD (ACN 082 656 139), SHEPRIDGE PTY LTD (ACN 082 696 077), GEOFFREY MICHAEL TAUBER, MORRY FRAID, ROGER ENRIQUEZ V 663 of 2000 RYAN J 25 SEPTEMBER 2003 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 663 of 2000 BETWEEN: TEMWELL PTY LTD (ACN 082 656 157) Applicant AND: DKGR HOLDINGS PTY LTD (formerly known as DYNAMIC DATA SYSTEMS PTY LTD) (In Liquidation) (ACN 062 778 616) First Respondent mCOM SOLUTIONS INC. Second Respondent DRAGON VENTURES. COM INC Third Respondent mCOM SOLUTIONS AUSTRALIA PTY LTD (In Liquidation) (ACN 091 375 950) Fourth Respondent DAVID HAINS Fifth Respondent ROBERT VAN ZANTEN Sixth Respondent DRAGONVENTURES.COM LTD Seventh Respondent RICHARD HAINS Eighth Respondent IAN MORRIS KIEFEL Ninth Respondent AND BETWEEN: mCOM SOLUTIONS INC. and mCOM SOLUTIONS AUSTRALIA PTY LTD (In Liquidation) (ACN 091 375 950) Cross-Claimants AND: TEMWELL PTY LTD (ACN 082 656 157) SLADEMERE PTY LTD (ACN 082 656 139) SHEPRIDGE PTY LTD (ACN 082 696 077) GEOFFREY MICHAEL TAUBER MORRY FRAID ROGER ENRIQUEZ Cross-Respondents JUDGE: RYAN J DATE: 25 SEPTEMBER 2003 PLACE: MELBOURNE RULING No 8 REASONS FOR FURTHER RULING ON PRIVILEGE OF SUBPOENAED DOCUMENTS PRODUCED BY DEACONS LAWYERS 1 On 12 September 2003 I published reasons for an earlier ruling on a claim for privilege which had been advanced on behalf of two non-parties, Hector Daniel Elbaum and D & E Consulting Pty Ltd ("D&E") in respect of certain documents produced on subpoena by Deacons Lawyers ("Deacons") who had acted as solicitors for Mr Elbaum and D&E. Since my earlier ruling, Mr Walker of Walker Herceg the solicitors acting for Mr Elbaum and D&E in relation to the subpoena, has, on 18 September 2003, sworn a further affidavit deposing that, for various reasons, the "modified Walker Herceg Schedule" to which I referred at [11] of my ruling of 12 September 2003 was not an exhaustive list of the documents in respect of which either or both Mr Elbaum and D&E wished to claim privilege. Accordingly, Mr Walker caused to be prepared a supplementary list identifying, by reference to the relevant folders produced by Deacons, the additional documents said to be protected by legal professional privilege. 2 In the course of argument on the morning of 22 September 2003 Mr Delany of Counsel for the mCom respondents contended that Mr Elbaum and D&E should not be permitted to agitate again the claim of privilege in respect of additional documents which could have been identified by their legal advisers before my earlier ruling of 12 September. However, I decided to accede to the application made on behalf of Mr Elbaum and D&E by Mr Goldblatt of Counsel. I considered that the most expedient course was to examine for myself the documents in the supplementary list and indicate in respect of each one whether the claim of privilege should be rejected or sustained. I have since undertaken that task, applying, so far as applicable, the principles applied in my earlier ruling of 12 September in the light of the several affidavits of Mr Elbaum and Mr Cattanach to which I have there referred. I have indicated the results of my review on a form of the supplementary list which has been adapted as a schedule to this ruling in a manner corresponding to the schedule to Ruling No 7 published on 24 September 2003. I certify that the preceding two (2) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan. Associate: Dated: 25 September 2003 Counsel for the Applicant Mr C D Golvan SC with Dr S Ricketson and Cross Respondents: Solicitors for the Applicant Meerkin & Apel and Cross Respondents: Counsel for the mCom Respondents Mr J L Sher QC with Mr J Delany and Cross-Claimants: Solicitors for the mCom Respondents Minter Ellison and Cross-Claimants: Counsel for Mr Elbaum Mr M Goldblatt and D&E Consulting Pty Ltd: Solicitors for Mr Elbaum Walker Herceg and D&E Consulting Pty Ltd Date of Hearing: 22 September 2003 Date of Ruling: 25 September 2003 SCHEDULE TO RULING NO 8 Doc. No. Description Ruling on Claim of Privilege Folder 2 2:1. Deacons memorandum file dated 27 March 2000 regarding sale of business Sustained 2:2. Deacons attendance note on Ken Cattanach dated 21 March 2000 Sustained 2:3. Facsimile Deacons to DDS dated 20 March 2000 regarding sale of business Sustained 2:4. Deacons attendance note with Ken Cattanach dated 20 March 2000 Sustained 2:6. Deacons attendance note on Daniel Elbaum dated 15 March 2000 Sustained 2:7. Facsimile DDS to Deacons dated 15 March 2000 enclosing letter DDS to Graham Bridges dated 15 March 2000 Rejected 2:8. Facsimile DDS to Deacons dated 15 March 2000 enclosing letter from Graham Bridges to DDS dated 14 March 2000 Rejected Folder 3 3:1 Email Vivi Renner to Miranda Reomeyn attaching draft letter to Feingold Partners dated 4 April 2000 Sustained 3:2 Email from Miranda Reomeyn to Vivi Renner dated 5 April 2000 Sustained 3:3 Email from Tom Luckock to Vivi Renner dated 5 April 2000 re assignment Sustained 3:4 Email from Vivi Renner to Tom Luckock dated 5 April 2000 re assignment Sustained 3:5 Email from Tom Luckock to Vivi Renner dated 5 April 2000 Sustained 3:6 Email from Vivi Renner to Tom Luckock dated 5 April 2000 re assignment Sustained 3:7 Email from Tom Luckock to VR dated 5 April 2000 re assignment Sustained 3:8 Deacons attendance note dated 18 April 2000 Sustained 3:9 Deacons attendance note dated 18 April 2000 Sustained 3:10 Deacons letter to DKGR Holdings re ASIC – Letter of Complaint dated 20 April 2000 Sustained 3:11 DKGR letter to Deacons dated 1 May 2000 regarding ASIC complaint Sustained 3:12 DKGR letter to Deacons dated 17 April 2000 regarding Letter of Complaint – ASIC Sustained 3:13 Facsimile Deacons to DKGR Holdings dated 20 April 2000 regarding ASIC – letter of complaint Sustained 3:14 Deacons memorandum regarding DDS - ASIC complaint dated 20 April 2000 Sustained 3:15 Deacons facsimile to DKGR re ASIC – Letter of Complaint dated 3 May 2000 Sustained 3:16 Copy letter (draft) Deacons to DKGR Holdings regarding Deed of Release dated 16 May 2000 Sustained 3:17 Letter Deacons to DKGR Holdings regarding Deed of Release dated 16 May 2000 Sustained 3:18 Letter Deacons to DKGR dated 2 June 2000 regarding Temwell/Adcock Rejected 3:19. Letter DKGR Holdings to Deacons dated 29 May 2000 enclosing letter from DKGR to mCom dated 29 May 2000 with handwritten amendments and facsimile Portman House Group to DKGR dated 29 May 2000 Rejected 3:20. Facsimile Deacons to DKGR dated 26 May 2000 with handwritten amendments attaching draft letter DDS to mCom Solutions dated 26 May 2000 Rejected 3:21. Deacons memorandum dated 18 April 2000 regarding ASIC letter Sustained 3:22. Letter DKGR to Deacons dated 17 April 2000 regarding letter of complaint to ASIC attaching letter from ASIC to DDS dated 10 April 2000 with handwritten amendments Sustained 3:23. Deacons attendance note on David Collins dated 5 April 2000 Sustained Folder 4 4.1. Letter from David D Colin (barrister) to Deacons dated 5 April 2000 regarding DDS and attached Summons in matter No. 2012 of 1999 in the Supreme Court of Victoria dated 4 April 2000 attaching affidavit of Anthony David Fell dated 4 April 2000; Sustained Folder 6 6:1. Facsimile from Project Lab to Deacons dated 7 May 2000 regarding complaint – environmental planning Sustained 6:2. Fax DKGR to Deacons dated 28 November 2000 attaching deed between Palicave Pty Limited and DDS dated June 2000 Rejected Folder 12 12:1. Copy letter DKGR to shareholders and convertible note holders with handwritten amendments dated 8 May 2000 Rejected Folder 14 14.1. Copy facsimile from ABL to DDS dated 24 March 2000 marked "working copy" with handwritten notations Rejected Folder 17 17:1. Deed of assignment of lease between Sandhurst Trustees Limited, D & E, mCom, Ian Kiefel and Peter Ryan dated 2000 notated sent to Ken Cattanach on 5 April 2000 as a first draft and marked draft Sustained Folder 18 18:1. Facsimile Deacons to DKGR dated 8 June 2000 enclosing draft notice to shareholders and convertible note holders Rejected 18:2. Facsimile Deacons to Daniel Elbaum dated 5 May 2000 (unsigned) Sustained 18:3. Memorandum Deacons to file re ASIC letter dated 18 April 2000 Sustained 18:4. Facsimile Deacons to Daniel Elbaum dated 30 March 2000 (unsigned) Sustained 18:5. Facsimile Deacons to DDS dated 20 March 2000 (unsigned) attaching copy of draft letter to Grey Perkins dated 21 March 2000 Sustained 18:6. Draft letter Deacons to DKGR re deed of release [note dated 6 August 2003] Sustained 18:7. Facsimile Deacons to DKGR re settlement statement dispute [note dated 6 August 2003] Sustained 18:8. Facsimile Deacons to DKGR re settlement statement dispute [note dated 6 August 2003] Sustained 18:9 Document entitled "Dynamic Data Systems Pty Limited – redemption of notes" prepared by Deacons (undated) Sustained 18:10 Facsimile Deacons to DDS dated 4 April 2000 enclosing draft letter to IT Technology Pty Limited dated 4 April 2000 Sustained 18:11. Document entitled "Summary of Company Extract of IT Technology Pty Limited" prepared by Deacons (undated) Sustained 18:12 Letter Deacons to DKGR dated 3 May 2000 regarding ASIC – letter of complaint Sustained Folder 19 19:1. Email Stewart Peters to Andrew Tyndale 26 March 2001 Rejected 19:2. Email Vivi Renner to Stewart Peters and Robert Symons dated 19 March 2001 attaching draft letters (3) Rejected Folder 20 20:1. Facsimile Project Lab to Deacons dated 7 May 2000 regarding complaint – environmental planning attaching letter from Environmental Planning Pty Limited to DKGR dated 20 June 2000 Sustained Folder 22 22:1. Letter DKGR to Deacons dated 22 June 2000 attaching deed between Palicave Pty Limited and DDS dated 14 February 2000 (15 pages) Sustained 22:2. Handwritten Deacons attendance note (undated) (2 pages) Sustained 22:3. Deacons attendance dated 13 February 2000 handwritten Sustained 22:4. Letter DKGR to Deacons dated 26 June 2000 Sustained 22:5. Document entitled "Offer to Palicave" undated Sustained Folder 23 23:1. Bundle of handwritten notes prepared by Deacons dated 4 April 2000 attaching drafts of various documents with handwritten amendments Sustained 23:2. Email from Stewart Peters to Vivi Renner dated 4 April 2000 enclosing draft fax to Feingold Partners dated 4 April 2000 Sustained 23:3. Email from Vivi Renner to Miranda Reomeyn dated 5 April 2000 Sustained 23:4. Bundle of draft affidavits of Hector Daniel Elbaum in proceedings Supreme Court of Victoria No. 2012 of 1999 with handwritten amendments prepared by Deacons dated April 2000 Sustained 23:5. Bundle of handwritten file notes prepared by Stewart Peters dated 6 April 2000 (5 pages) Sustained 23:6. Handwritten file note by Stewart Peters dated 7 April 2000 (1 page) Sustained 23:7. Facsimile from Dynamic Data Systems to Deacons dated 31 March 2000 regarding draft shareholder and note holder letter Sustained 23:8. Bundle handwritten notes and draft documents dated 30 March 2000 Sustained Folder 24 24:1. Email from Vivi Renner to Miranda Reomeyn dated 16 June 2000 attaching document no. 296597_3.doc Sustained 24:2. Memorandum from David Collins dated 5 June 2000 in Supreme Court of Victoria action 2012 of 1999 Sustained 24:3 Copy of above Sustained 24:4 Bundle of handwritten attendance notes and draft documents with hand writing dated 22 May 2000 (Deacons) Sustained Folder 25 25:1. Handwritten notes dated 17 August 2000 (2 pages) Sustained 25:2. Email Vivi Renner to DKGR attaching 3 letters dated 30 June 2000 Rejected Folder 26 26:1. Email Vivi Renner to Stewart Peters dated 1 September 2000 Rejected Folder 27 27:1. Facsimile Deacons to DKGR and Andrew Tyndale dated 15 February 2001 Sustained 27:2. Email Kylie Axiac of Deacons dated 15 February 2001 attaching email to Andrew Tyndale dated 15 February 2001 Sustained 27:3. Facsimile Deacons to DKGR Holdings and Andrew Tyndale dated 16 February 2001 enclosing memorandum from Michael Galvin (Barrister) dated 16 February 2001 Sustained 27:4. Email Kylie Axiac to Andrew Tyndale dated 16 February 2001 attaching letter to Ken Cattanach and Andrew Tyndale dated 16 February 2001 Sustained 27:5. Email Stewart Peters to Kylie Axiac dated 16 February 2001 Sustained 27:6. Email Kylie Axiac to Andrew Tyndale (undated) attaching letters to Ken Cattenach and Andrew Tyndale and fax to Merkin & Apel Sustained 27:8. Facsimile Deacons to DKGR and Andrew Tyndale dated 20 February 2000 attaching Minutes of undertaking and consent order made by Justice Merkel in Federal Court proceedings V663 of 2000 dated 16 February 2001 and facsimile Deacons to Merkin Apel dated 20 February 2001 Sustained 27:9. Facsimile Deacons to DKGR and Andrew Tyndale dated 20 February 2001 attaching letter from Merkin Apel to Deacons dated 20 February 2001 Sustained 27:10. Document entitled "Lists of Current Pleading" – Temwell matter with handwritten amendments (undated) Sustained 27:11. Email Kylie Axiac to Andrew Tyndale (undated) Sustained 27:12. Email Stewart Peters to Vivi Renner and Robert Symons (undated) attaching draft fax to Ken Cattanach and Andrew Tyndale Sustained 27:13. Draft email Stewart Peters to Andrew Tyndale Sustained 27:14. Fax Deacons to DKGR and Andrew Tyndale dated 27 February 2001 attaching Minutes of undertaking consent order made by Justice Merkel in Federal Court proceedings V663 of 2000 dated 21 February 2001 Sustained 27:15. Fax Deacons to DKGR and Andrew Tyndale dated 1 March 2001 attaching fax from Merkin Apel to Deacons dated 1 March 2001 Sustained 27:16. Fax Deacons to DKGR and Andrew Tyndale dated 18 April 2001 (3 pages) Sustained 27:16A Confirmation sheet for 27:16 Sustained 27:16B Confirmation sheet for 27:16 Sustained 27:17. Fax Deacons to DKGR and Andrew Tyndale dated 7 March 2001 attaching copy of facsimile to Merkin Apel dated 7 March 2001 Sustained 27:17A Confirmation sheet for 27:17 Sustained 27:17B Confirmation sheet for 27:17 Sustained 27:18. Email Kylie Axiac to Stewart Peters dated 7 March 2001 Sustained 27:19. Facsimile Deacons to DKGR and Andrew Tyndale dated 7 March 2001 attaching fax from Merkin Apel dated 6 March 2001 Sustained 27:20. Email Kylie Axiac to Andrew Tyndale dated 7 March 2001 attaching draft letter to DDS dated 7 March 2001 Sustained 27:21. Email Stewart Peters to Andrew Tyndale dated 5 March 2001 attaching facsimile Deacons to Ken Cattanach and Andrew Tyndale dated 5 March 2001 Sustained 27:22. Facsimile Deacons to DKGR and Andrew Tyndale dated 5 March 2001 Sustained 27:23. Facsimile Deacons to DKGR and Andrew Tyndale dated 5 March 2001 Sustained 27:24. Email from 385Mail (Deacons) to Stewart Peters dated 1 March 2001 attaching fax from DKGR Holdings to Stewart Peters dated 1 March 2001 Sustained 27:25. Email Kylie Axiac to Christine Vagg dated 22 February 2001 Sustained 27:26. Robert Symons to Ross Millen, Rudy Keckert and Stewart Peters dated 21 February 2001 Sustained 27:27. Email Stewart Peters to Andrew Tyndale dated 1 March 2001 Sustained 27:28. Copy fax transmission sheet Deacons to DKGR and Andrew Tyndale dated 1 March 2001 Sustained 27:29 Fax Deacons to Michael Galvin dated 20 February 2001 Sustained Folder 28 28:1. Email Stewart Peters to C Vagg dated 22 February 2001 Sustained 28:2. Facsimile DKGR to Stewart Peters dated 1 March 2001 Sustained 28:3. Email Kylie Axiac to Stewart Peters dated 7 March 2001 Sustained 28:4. Facsimile DKGR to Deacons dated 8 March 2001 attaching draft letter to mCom Solutions dated 7 March 2001 Sustained 28:5. Email from Deacons Mail Room to Stewart Peters dated 8 March 2001 attaching facsimile from DKGR to Deacons dated 8 March 2001 Sustained 28:6. Deacons file note dated 8 March 2001 (handwritten) Sustained 28:7. Deacons mail room to Robert Symons dated 8 March 2001 attaching facsimile from DKGR to Deacons dated 8 March 2001 Sustained 28:8. Email Stewart Peters to Robert Symons dated 9 March 2001 attaching copy facsimile from DKGR Holdings to Deacons dated 8 March 2001 Sustained 28:9. Email from Vivi Renner to Stewart Peters dated 9 March 2001 Sustained 28:10. Fax Deacons to Andrew Tyndale dated 16 March 2001 Sustained 28:11. Email Cecilia Luk to Stewart Peters dated 16 March 2001 attaching facsimile Deacons to Andrew Tyndale dated 16 March 2001 Sustained 28:12. Deacons file note handwritten dated 16 March 2001 Sustained 28:13. Deacons file note handwritten dated 18 March 2001 Sustained 28:14. Facsimile Deacons to Andrew Tyndale dated 16 March 2001 Sustained 28:15. Email Vivi Renner to Stewart Peters dated 9 March 2001 Sustained 28:16. Email Stewart Peters to Andrew Tyndale dated 7 March 2001 attaching facsimile Deacons to DKGR and Andrew Tyndale dated 7 March 2001 Sustained 28:17. Copy fax transmission sheets of facsimile Deacons to DKGR and Andrew Tyndale dated 20 March 2001 Sustained 28:18. Deacons handwritten file note dated 23 March 2001 Sustained 28:19. Email Stewart Peters to Andrew Tyndale dated 26 March 2001 Sustained 28.20 Deacons Handwritten file note dated 21 March 2001 (1 page) Sustained 28.21 Deacons Handwritten file note of att on M Galvin dated 21 March 2001 (1 page) Sustained 28.22 Deacons Handwritten file note of att on Cattanach dated 21 March 2001 (1 page) Sustained 28.23 Fax Deacons to DKGR and Andrew Tyndale dated 22 March 2001 Sustained 28.24 Fax Deacons to DKGR and Andrew Tyndale dated 21 March 2001 Sustained 28.25 Deacons Handwritten file note dated 18 March 2001 (3 pages) Sustained 28.26 Deacons Handwritten file note dated 16 March 2001 (6 pages) Sustained Folder 28A – This folder was not sighted in original inspection 28A:1. Memorandum Vivi Renner re sale of business completion negotiations dated 19 March 2001 Rejected Folder 29 29:1. Handwritten notes by Deacons (undated) Sustained 29:2. Facsimile Deacons to DKGR dated 6 July 2001 Sustained 29:3. Bundle of handwritten notes dated 6 July 2001 prepared by Deacons (3 pages) Sustained Folder 38 38:1. Deacons handwritten file note dated 16 November 2000 (document no. 77) Sustained 38:2. Document entitled "Synopsis" (3 Pages) undated (document no. 98) Rejected 38:3. Handwritten file note [document no. 99] – 2 pages Sustained Folder 39 - This folder was not sighted in original inspection 39:1. Fax DDS to Deacons dated 22 March 2000 attaching letter mCom to D&E re consultancy agreement dated 21 March 2000 Sustained 39:2. Facsimile Project Lab to Deacons dated 30 June 2000 attaching various letters from mCom in respect of settlement statements (11 pages) Sustained 39:3. Email Vivi Renner to DDS dated 30 June 2000 attaching draft letters to mCom and Temwell (3) Sustained 39:4. Draft of above with handwritten amendments Sustained 39:5. Email Vivi Renner to Daniel Elbaum dated 3 July 2000 attaching amended letters to mCom and Temwell Sustained