FEDERAL COURT OF AUSTRALIA Spatialinfo Pty Ltd v Telstra Corporation Ltd [2005] FCA 455 PRACTICE AND PROCEDURE – Subpoena – Notice to produce – Whether fishing or oppressive – Fishing – Relevance of availability of pre‑action discovery – Legal professional privilege – Whether subpoena or notice to produce can be set aside on the ground that they seek documents that are highly likely to be protected by legal professional privilege MAINTENANCE AND CHAMPERTY – Litigation funding agreement – Funder entitled to proportion of fruits of proceeding – Whether champertous – Factors to be taken into account Clairs Keeley v Treacy (2003) 28 WAR 139 considered Elfic Ltd v Macks [2003] 2 Qd R 125 cited Fostif Pty Ltd v Campbells Cash & Carry Pty Ltd [2005] NSWCA 83 considered Ram Coomar Coondoo v Chunder Canto Mookerjee (1876) 2 App Cas 186 cited Magic Menu Systems Pty Ltd v AFA Facilitation Pty Ltd (1997) 72 FCR 261 cited Gore v Justice Corporation Pty Ltd (2002) 119 FCR 429 cited Clairs Keeley v Treacey [2004] WASCA 277 considered Commissioner for Railways v Small (1938) 38 SR (NSW) 564 cited WA Pines Pty Ltd v Bannerman (1980) 41 FLR 175 cited Caltex Refining Co Pty Ltd v Amalgamated Metal Workers Union (1990) 51 IR 113 cited Treasurer of the Commonwealth of Australia v CanWest Global Communications Corp [1997] FCA 578 cited Bailey v Beagle Management Pty Ltd (2001) 105 FCR 136 cited Trade Practices Commission v Arnotts Ltd (No 2) (1989) 88 ALR 90 applied Re ACI International Ltd (1986) 11 ACLR 240 cited Apache Northwest Pty Ltd v Western Power Corporation (1998) 19 WAR 350 cited Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34 cited Hamilton v Oades (1989) 166 CLR 486 applied Pollack v Retravision (NSW) Ltd [1996] FCA 1124 applied Re Global Medical Imaging Management Ltd (2001) 38 ACSR 214 distinguished Apple Computer Australia Pty Ltd v Wily [2002] NSWSC 855 distinguished Esso Australia Resources Ltd v Federal Commissioner of Taxation (1999) 201 CLR 49 cited Cook v Pasminco Ltd (No 2) (2000) 107 FCR 44 cited Re Kingsheath Club of the Clubs Ltd [2003] FCA 1034 considered Re Addstone Pty Ltd [1998] FCA 1568 cited Elfic Ltd v Macks [2000] QSC 18 cited SPATIALINFO PTY LIMITED v TELSTRA CORPORATION LIMITED V240 OF 2004 SUNDBERG J 22 APRIL 2005 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V240 OF 2004 BETWEEN: SPATIALINFO PTY LIMITED (ACN 071 977 921) APPLICANT AND: TELSTRA CORPORATION LIMITED (ACN 051 775 556) RESPONDENT JUDGE: SUNDBERG J DATE OF ORDER: 22 APRIL 2005 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. On the motion of IMF (Australia) Ltd and Insolvency Litigation Fund Pty Ltd notice of which was filed on 20 December 2004, the subpoena directed to IMF (Australia) Ltd and that directed to Insolvency Litigation Fund Pty Ltd be set aside. 2. On the applicant's motion notice of which was filed on 28 January 2005: (a) the respondent's notice to produce dated 13 December 2004 be set aside; and (b) it be declared that the applicant is obliged to produce to the respondent an unmasked copy of clause 6.1 of the Funding Agreement made 1 July 2004 between IMF (Australia) Ltd, Insolvency Litigation Fund Pty Ltd and the applicant (and others), but is not obliged to produce any other masked parts thereof. 3. On the applicant's motion notice of which was filed on 21 February 2005, the respondent's notice to produce dated 11 February 2005 be set aside insofar as it seeks the documents in the fourth to thirteenth categories thereof. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V240 OF 2004 BETWEEN: SPATIALINFO PTY LIMITED (ACN 071 977 921) APPLICANT AND: TELSTRA CORPORATION LIMITED (ACN 051 775 556) RESPONDENT JUDGE: SUNDBERG J DATE: 22 APRIL 2005 PLACE: MELBOURNE REASONS FOR JUDGMENT BACKGROUND 1 On 27 February 2004 the applicant (Spatialinfo) commenced a proceeding in the Court against the respondent (Telstra) claiming declarations, injunctions, damages and other relief with respect to certain intellectual property owned by Spatialinfo. 2 IMF (Australia) Ltd (IMF), a company listed on the Australian Stock Exchange, and its wholly‑owned subsidiary Insolvency Litigation Fund Pty Ltd (ILF) conduct the business of litigation funding. Where it is unnecessary to distinguish between IMF and ILF I will refer to them as "the funders". Pursuant to an approach to the funders made by Spatialinfo in May 2004, on 1 July 2004 the funders, Spatialinfo and other associated parties entered into an agreement whereby ILF agreed to provide litigation funding to Spatialinfo in connection with the proceeding against Telstra (the funding agreement). 3 On 11 November 2004 Telstra served on Spatialinfo a notice to produce requiring the production of the funding agreement (the first notice to produce). 4 On 26 November 2004 Telstra filed a notice of motion seeking, amongst other things, an order that the proceeding be stayed "as it is being unlawfully maintained and is an abuse of the processes of the Court" (Telstra's motion). On 3 December 2004 Spatialinfo produced a redacted copy of the funding agreement in response to the first notice to produce. 5 At the request of Telstra, on 13 December 2004 the Court issued subpoenas addressed to ILF and IMF requiring production of the documents listed in the schedules. On the same date Telstra served on Spatialinfo a notice to produce seeking production of various documents relating to the funding of the proceeding (the second notice to produce). On 20 December 2004 the funders filed a notice of motion seeking orders that the subpoenas be set aside. 6 On 28 January 2005 Spatialinfo filed a notice of motion seeking to set aside the first notice to produce insofar as it relates to the redacted parts of the funding agreement, and the second notice to produce. 7 On 14 February 2005 Telstra served on Spatialinfo a notice to produce requiring it to produce further documents relating to the funding of the proceeding (the third notice to produce). On 21 February 2005 Spatialinfo filed a notice of motion seeking an order that the third notice to produce be set aside. 8 Now before me are the funders' motion to set aside the subpoenas, Spatialinfo's motion to set aside the first notice to produce insofar as it relates to the redacted parts of the funding agreement and the second notice to produce, and Spatialinfo's motion to set aside the third notice to produce. Telstra's motion is not before me. 9 In support of their motion the funders relied on three affidavits sworn by Clive Bowman, a manager and a company secretary of the funders. They also relied on an affidavit sworn by Kenneth Adams of Freehills, solicitors for Telstra, filed in support of Telstra's motion. In support of its motions Spatialinfo relied on affidavits sworn by its solicitor, Mark Dobbie of Middletons, and its chief executive Anthony Cotter. Spatialinfo also relied on the Adams affidavit. Telstra relied on documents produced by Mr Adams in another affidavit sworn by him. I refer to the contents of these affidavits later in these reasons. THE SUBPOENAS 10 The subpoenas addressed to IMF and ILF are in the same form. Each requires production of "1. Records of any meetings within your company since 1 January 2004 concerning the proceeding or the provision, or continued provision, of funding to the applicant in respect thereof. 2. All board minutes since 1 January 2004 recording discussions relating to the proceeding or the provision, or continued provision, of funding to the applicant in respect thereof. 3. Any business plans or management reports created by or for your company since 1 January 2004 concerning the decision to provide litigation funding to the applicant in this proceeding or the way in which such funding was to be provided. 4. The completed proposal form or similar document received from the applicant in respect of its application for funding in connection with the proceeding. 5. Documents requested by your company from the applicant following the applicant's lodgement of the aforesaid proposal form and which your company referred to or considered in connexion with the decision to provide funding. 6. All written correspondence (including emails) between your company and the applicant or its solicitors of record in the proceeding relating to the proceeding or the funding (or continued funding) thereof. 7. File notes of telephone conversations between employees or representatives of your company and of the applicant (or its solicitors of record in the proceeding) relating to the proceeding or the funding (or continued funding) thereof. 8. Diary notes of meetings between employees or representatives of your company and of the applicant (or its solicitors of record in the proceeding) relating to the proceeding or the funding thereof." Telstra did not press the fifth category of documents sought in the subpoenas. THE FIRST AND SECOND NOTICES TO PRODUCE 11 The first notice to produce, so far as now relevant, simply requires Spatialinfo to produce a wholly unmasked copy of the funding agreement. The second notice to produce requires it to produce: "1. All business plans or management reports created by or for your company since 1 January 2004 concerning the decision to apply for litigation funding. 2. All board minutes since 1 January 2004 recording discussions relating to the decision to seek funding in the proceeding and the circumstances in which funding would be accepted. 3. All board minutes since 1 January 2004 mentioning IMF (Australia) Ltd or Insolvency Litigation Fund Pty Ltd (the Funders). 4. The proposal or application form or similar document completed by the applicant and provided to either of the Funders in respect of the applicant's application for funding for the proceeding. 5. Copies of all documents provided by the applicant to either of the Funders since 1 January 2004. 6. All written correspondence (including emails) since 1 January 2004 between the applicant (or its solicitors) and either of the Funders relating to the proceeding or the funding, or continued funding, thereof. 7. File notes of telephone conversations between employees or representatives of the applicant (or its solicitors of record in the proceeding) and either of the Funders relating to the proceeding or the funding (or continued funding) thereof. 8. Diary notes of meetings between employees or representatives of the applicant (or its solicitors of record in the proceeding) and either of the Funders relating to the proceeding or the funding thereof." Telstra did not press the fifth category of documents sought in the notice. FUNDING AGREEMENT 12 Before describing the third notice to produce it is convenient to record the essential terms of the funding agreement. The funding agreement recites that Spatialinfo has approached the funders to provide litigation funding to enable it to continue with the proceeding, that Spatialinfo has instructed Middletons to conduct the proceeding, having formerly instructed Clayton Utz, that Spatialinfo is not in a financial position to pay the necessary legal fees in relation to the proceeding, and that the funders have agreed to provide funds pursuant to the funding agreement. 13 By clause 2.1 ILF agrees to pay "(a) the Legal Costs and Disbursements; (b) the Past Costs directly to Clayton Utz, in accordance with and subject to clause 2.4; and (c) any costs order made against Spatialinfo in the Proceeding in respect of costs incurred during the term of this Agreement." The expression "Legal Costs and Disbursements" is defined as costs and disbursements reasonably incurred by Middletons from 24 June 2004 until the termination of the agreement, for the sole purpose of the prosecution of the proceeding. The expression "Past Costs" is defined as the costs and disbursements of Clayton Utz incurred prior to the agreement in the sum of an amount that has been blanked out. Clause 2.2 provides that Middletons will be retained by Spatialinfo in respect of the proceeding, but will be paid directly by ILF. Clause 2.3 provides that ILF will provide any security for costs ordered by the court relating to costs incurred during the term of the agreement. Clause 2.4 sets out amounts of the Past Costs payable by ILF and the dates on which they are payable. The dates and amounts are blanked out. 14 Clause 4.1 provides: "Control of the Proceeding will be in the hands of Spatialinfo and the Solicitors. ILF will be kept advised of the course of the Proceeding sufficient to enable it to determine what work has been done and the reasonableness or otherwise of invoices rendered by the Solicitors." Clause 4.2 provides that ILF has no standing to give instructions to Middletons, and may not exercise any control over the proceeding. ILF agrees to provide such assistance in respect of the proceeding as Middletons reasonably request: clause 5.1. 15 Clause 6.1 provides: "In consideration of the funding provided by ILF under this Agreement, Spatialinfo agrees to pay to ILF out of the Resolution Sum: (a) an amount equal to all monies paid or payable by ILF under clause 2; and (b) an amount equal to: (i) the greater amount of [blank] times the sum of the Legal Costs and Disbursements and the Past Costs paid or payable by ILF and [blank] of the Resolution Sum, if Resolution is on or within [blank] from the date of this Agreement; (ii) the greater of [blank] times the sum of the Legal Costs and Disbursements and the Past Costs paid or payable by ILF and [blank] of the Resolution Sum, if Resolution is after [blank] but within [blank] from the date of this Agreement; and (iii) the greater of [blank] times the sum of the Legal Costs and Disbursements and the Past Costs paid or payable by ILF and [blank] of the Resolution Sum, if Resolution is on or after [blank] from the date of this Agreement." "Resolution" means when all or any part of the Resolution Sum is received by Spatialinfo. "Resolution Sum" means the fruits of the proceeding, including any sum for which it is settled or for which judgment is given in favour of Spatialinfo. 16 Clause 7 deals with "Settlement": "7.1 The terms of any settlement of the Proceeding … will be determined by Spatialinfo in consultation with the Solicitors. 7.2 If a settlement of any Proceeding is proposed to or by Spatialinfo then the terms of that proposed settlement will be notified to ILF. 7.3 ILF may request that Spatialinfo obtain the advice of Senior Counsel at ILF's cost in relation to whether settlement should occur and the terms of such settlement. After receipt of such advice Spatialinfo will then determine whether settlement should occur and the terms of that settlement." 17 Clause 8 deals with "Termination" and is in part as follows: "8.2 ILF shall be entitled in its absolute discretion exercisable at any time to terminate this Agreement. … 8.5 If ILF terminates this Agreement prior to the Resolution Sum being received in accordance with this Agreement: (a) ILF will not be entitled to be paid any amount under clause 6.1(b); (b) ILF will be entitled to be paid by Spatialinfo out of any Resolution Sum an amount calculated in accordance with clause 6.1(a) but only to the extent that the money was paid (or the obligation to pay it was incurred) by ILF prior to termination." By clause 8.6 IMF's obligations cease on the date the termination becomes effective, save for any obligations accrued to that date. Those accrued obligations include the payment of any outstanding costs to Middletons incurred up to the date the notice of termination takes effect, the payment of any costs incurred during the currency of the agreement and ordered to be paid by Spatialinfo in the proceeding, and so much of the costs referred to in clause 2.4 which have accrued for payment: clause 8.7. 18 Clause 12.1 provides: "Spatialinfo will not seek any order from any court which may detrimentally affect ILF's or IMF's rights under this Agreement, other than with the consent of ILF and IMF." 19 Clause 13.1 provides: Spatialinfo will not act in any way, or bind itself to act in any way, which could or will adversely affect ILF's rights under this Agreement …." 20 Clause 23.1 provides that it is a condition precedent to the Agreement that: "(a) Clayton Utz, the legal firm to whom Past Costs are owed, confirms in writing to ILF, without qualification, that it will not challenge or in any way seek to impeach this Agreement and that it agrees to ILF receiving ILF's entitlements under this Agreement in priority to any claims against Spatialinfo which Clayton Utz may have, including in respect of costs and disbursements; and (b) Clayton Utz agree with Spatialinfo that provided the Past Costs are paid together with any payments Spatialinfo agrees to make to Clayton Utz, it will not, except if there is a breach of any such agreement with Spatialinfo not rectified within seven days, or until the Proceeding and any appeal in the Proceeding is completed, take any action to recover any debt due to it by Spatialinfo." THE THIRD NOTICE TO PRODUCE 21 The third notice seeks the following documents directed to clause 23 of the funding agreement: (a) the agreement referred to in clause 23.1(b); (b) the deed of agreement between Clayton Utz and Spatialinfo dated on or about 1 July 2004, and (c) any document from Clayton Utz confirming that it will not challenge the funding agreement. The remainder of the notice is directed to an affidavit sworn by Mr Dobbie in support of Spatialinfo's motions, seeking the records of instructions received from Spatialinfo, advice given by Mr Dobbie and of conferences and discussions referred to in his affidavit. MAINTENANCE AND CHAMPERTY – THE SUBPOENAS 22 It is common ground that the subpoenas are directed only to that part of Telstra's motion that seeks to have the proceeding stayed on the ground that "it is being unlawfully maintained and is an abuse of the processes of the Court". It is also common ground that although Telstra's motion is not now before the Court, it is necessary to consider whether the funding of the proceeding could constitute maintenance and champerty, and thus perhaps constitute an abuse of process, in order to put the challenge to the subpoenas and notices to produce in their proper context. 23 The fact that litigation is funded pursuant to an agreement that may be regarded as constituting maintenance and champerty does not, of itself, constitute an abuse of process or grounds for a stay: Clairs Keeley v Treacy (2003) 28 WAR 139 at [189] (Clairs Keeley); Elfic Ltd v Macks [2003] 2 Qd R 125 at [67]; Fostif Pty Ltd v Campbells Cash & Carry Pty Ltd [2005] NSWCA 83 at [99]. While maintenance and champerty may, depending on the circumstances, so taint proceedings as to render them an abuse of process, it has increasingly been accepted that litigation funding may render positive outcomes for the administration of justice by providing impecunious litigants with access to the courts they otherwise would not have: Ram Coomar Coondoo v Chunder Canto Mookerjee (1876) 2 App Cas 186 at 210; Magic Menu Systems Pty Ltd v AFA Facilitation Pty Ltd (1997) 72 FCR 261 at 267; Gore v Justice Corporation Pty Ltd (2002) 119 FCR 429 at 451. 24 Whether a proceeding is maintained, and the separate question whether such maintenance poses a potential risk to the court's processes so as to justify a stay, turn on the terms and conditions upon which the funding is provided: Clairs Keeley and Clairs Keeley v Treacey [2004] WASCA 277 (Clairs Keeley No 2). In Clairs Keeley No 2 the Court of Appeal at [125] and [132] said: "Consequently, it is necessary to balance the competing interests in the course of assessing that risk to the due administration of justice which has been introduced by the funding arrangements. In seeking that balance one important consideration should, we think, be whether or not the litigation is, in truth, still that of the plaintiff or defendant. That is to say, the funded party should still be in a position to benefit from a successful outcome and should be entitled to make informed decisions which are critical to the litigation. If the funder's level of control is such that, in reality, it will be making decisions of that kind, or even if the funded parties are not to be given sufficient information to enable them properly to make decisions of that kind, there will be a substantial risk that the funder's intervention will be inimical to the due administration of justice and that the Court's processes will be misused for commercial gain. … The question for the Court, in conducting the balancing exercise referred to above, is whether the degree of control which IMF is capable of exercising (in law and in fact) is such as to give rise to an unacceptable risk of abuse of the Court's processes, and is therefore, contrary to the public interest." 25 In Clairs Keeley and Clairs Keeley No 2 the Court referred to various factors relevant to determining the question it had thus posed: · whether the litigation is being processed in such a way that the interests of the plaintiff are subservient to those of the funder: Clairs Keeley No 2 at [71] · whether there is a high probability that the action will be taken out of the plaintiffs hands and run by the funder, so that the plaintiff will become a mere cipher with the effect that there will be a de facto assignment to the funder of the plaintiff's causes of action: Clairs Keeley at [128] · whether the funded party is still in a position to benefit from a successful outcome to the litigation: Clairs Keeley No 2 at [125] · whether the funded party is entitled to make informed decisions which are critical to the litigation and whether the funded party will be given sufficient information to enable it properly to make decisions of that kind: Clairs Keeley No 2 at [125], and · the position of the plaintiff's solicitors, and specifically whether they are independent of the funder, are alive to the possibility of abuse or conflict, and are fully aware of their fiduciary obligations to their client: Clairs Keeley No 2 at [75]. 26 In Clairs Keeley No 2 the Court accepted that some degree of control on the part of a funder is inevitable and acceptable. It said at [124] that although in that case the conduct of the litigation was in the hands of the plaintiff's solicitors: "there is no doubt that IMF continues to exercise a degree of control. However, that will be inevitable in the case of any litigation funding of this kind. Without some degree of control the risk would be too great for the funder to undertake the funding, especially when the litigation is protracted, complex and expensive. If litigation funders were to be discouraged, by denying them some measure of control sufficient to protect their investment, the number of oppressive or unmeritorious claims and defences might be reduced, but at the risk of preventing access to justice, or equal access to justice, by many others with genuine claims or defences and no other means of advancing, or effectively advancing, them." See also Fostif at [137]. 27 In Clairs Keeley No 2 at [71] the Court said it would be an abuse of process if litigation were "to be pursued in such a way that the interests of the plaintiffs are subservient to those of the funder". Cf the first factor set out at [25]. In Fostif, while agreeing with much of what had been said in Clairs Keeley and Clairs Keeley No 2, the New South Wales Court of Appeal disagreed with what it called the "categorical thrust" of that statement. Mason P, with whom the other members of the Court agreed, said at [114]: "In my opinion, a conclusion about abuse of process must stem from a finding directed at the actual or likely conduct of the party in whose name the litigation is brought (or its agents). The court is not concerned with balancing the interests of the funder and its clients. Indeed, it is not concerned with the arrangements, fiduciary or otherwise, between the plaintiff and the funder except so far as they have corrupted or have a tendency to corrupt the processes of the court in the particular litigation. It is only when they have that quality that the defendant has standing to complain about them." 28 It is not necessary in the present case, when Telstra's motion is not before the Court, to express a preference for the approach in Clairs Keeley No 2 at [71] or that in Fostif. There is much common ground in Clairs Keeley, Clairs Keeley No 2 and Fostif. The present examination of the law of maintenance in its application to funded litigation, and the separate question whether such funding amounts to an abuse of process, is undertaken solely for the purpose of putting the challenges to the subpoenas and notices to produce in their proper context. THE SUBPOENAS – GROUNDS OF OBJECTION Fishing 29 Fishing was described by Jordan CJ in Commissioner for Railways v Small (1938) 38 SR (NSW) 564 at 575 as "endeavouring, not to obtain evidence to support his case, but to discover whether he has a case at all". In WA Pines Pty Ltd v Bannerman (1980) 41 FLR 175 at 190 Lockhart J said: "In Associated Dominion Assurance Society Pty Ltd v John Fairfax & Sons Pty Ltd, Owen J said: 'A "fishing expedition", in the sense in which the phrase has been used in the law, means, as I understand it, that a person who has no evidence that fish of a particular kind are in a pool desires to be at liberty to drag it for the purpose of finding out whether there are any there or not'. … In the present case the appellant seeks discovery and leave to interrogate before there is any evidence that the respondent did not have the belief required by s 155(1). There are the barest allegations in par 5 and 6 of the statement of claim. They are denied by the respondent in his defence who, in addition, swore an affidavit that he held the relevant belief required by the section. Brochures which were published obviously by, or with the concurrence of, the appellant contain statements which at the very least are not inconsistent with the respondent's statement of belief. Together with the form of the notice under the section that is all the material on which this Court is asked to act and to permit discovery and administration of interrogatories. 'This is not merely clutching at a non‑existent straw, but expecting to be carried by it': per Menzies J in Mulley v Manifold. I have no doubt that the appellant is seeking to use the weapons of discovery and interrogatories to find out if it has a case of which it presently knows nothing. It is a fishing expedition to which this Court will not lend its aid. I respectfully agree with the following passage from the reasons for judgment of Smithers J in Melbourne Home of Ford Pty Ltd v Trade Practices Commission and Bannerman: 'Accordingly in a proceeding pursuant to s 163A (1), certainly in the absence of satisfactory evidence that the Chairman did not have the relevant reason to believe, the applicants are faced with the prima facie validity of the notice. In the absence of such evidence the proceeding is essentially speculative in nature. In such circumstances, for the court to assist the applicants by making available to them the processes of interrogatories and discovery would be to assist them in an essentially fishing exercise and from this the court on established principle should refrain'." See also per Bowen CJ at 176 and per Brennan J at 181‑182. 30 The funders' "fishing" objection was based on the approach taken in the cases cited in the preceding paragraph. If this issue were to be decided on that basis, I would conclude that the subpoenas are fishing and should be set aside. Telstra's case for a stay is grounded on the fact that the funders are funding Spatialinfo's case. In the affidavit filed in support of Telstra's motion, its solicitor states his belief that the funders are litigation funders for Spatialinfo in the proceeding. He sets out the matters that cause him to have this belief. He then says that following production of the funding agreement sought by the first notice to produce, Telstra would assess the need for further discovery in respect of the "alleged unlawful maintenance" of the proceeding. As indicated at [23], the mere fact that litigation is funded is not sufficient to constitute maintenance, let alone an abuse of process. As was said by Templeman J in Clairs Keeley at [82], there must be shown to be "some devil in the detail of the funding arrangements". Telstra has shown no "devil" either in relation to the terms of the funding agreement or by reference to any other circumstance. The funding agreement contains no feature such as those upon which the decision in Clairs Keeley depended. Its principal provisions are set out at [12] to [20]. Its most important features are: · Spatialinfo's solicitors will be retained by it · control of the proceeding is in the hands of Spatialinfo and its solicitors · the funders have no standing to give instructions to the solicitors · the funders may not exercise any control of the proceeding · the terms of any settlement of the proceeding will be determined by Spatialinfo in consultation with the solicitors. 31 The fact that the funders are entitled to be kept advised of the course of the proceeding sufficient to enable them to determine what work has been done and the reasonableness or otherwise of invoices rendered by the solicitors (clause 4.1), does not constitute impermissible control over the litigation. It is well within the concept approved in Clairs Keeley No 2 and Fostif of "some degree of control sufficient to protect" the funders' investment. 32 The funders' agreement to provide such assistance in respect of the proceeding as the solicitors may request (clause 5.1) is not suggestive of control, let alone inappropriate control. The fact that Spatialinfo must notify the funders of the terms of any proposed settlement, and may request that Spatialinfo obtain the advice of senior counsel as to whether settlement should occur and as to its terms, is not inappropriate or excessive control. Again it is merely protective of the funders' investment. It is Spatialinfo that instructs counsel of its choice, and it is in Spatialinfo's interests that it should do so to guard against an improvident or unwise settlement. Further, once the advice is obtained, it is for Spatialinfo to determine whether to settle and upon what terms. 33 The funders' right to terminate the agreement in their absolute discretion was said by Telstra to be a means of controlling the proceeding. The funders' right to terminate, expressed in the same terms, was not seen as obnoxious in Clairs Keeley. It is to be remembered that if the funders terminate the agreement, they remain liable for any obligations accrued to the date of termination, and have no right to recover what they have already paid Spatialinfo or its solicitors. They lose their right to a proportion of the fruits of the proceeding. Mr Bowman's evidence was that a right of termination provides the capacity to limit the funders' exposure to further adverse costs, and ensures that they are not required to fund unviable cases. He said that because of the significant cost consequences for the funders consequent upon termination, that was a serious event. There had been a termination in only three cases in the approximately 210 that had been funded. In those circumstances I do not accept that the existence of the termination clause is an indirect control mechanism because of the funders' ability to use it as a threat. For the reasons given by Mr Bowman, the right to terminate is an almost unavoidable feature of a litigation funding agreement. As he said, the funders would be very unlikely to fund a case without a right to terminate. 34 The provisions in the funding agreement by which Spatialinfo agrees not to seek any court order which may detrimentally affect the funders' rights under the agreement, and not to act in a way that could adversely affect those rights (including not charging or otherwise encumbering the causes of action) (clause 12.1 and 13.1), are quite reasonable provisions that may well have been implied in any event. They do not amount to impermissible control. 35 The terms of the funding agreement disclose no "devil in the detail" or evidence that the funders will in truth run the litigation. Indeed, they point firmly to the contrary. Further, Mr Bowman's evidence is that · the funders have not acted contrary to clause 4 of the funding agreement (control of the proceeding is in Spatialinfo's hands) · they have not, and are not, controlling the proceeding · they do not determine the steps to be taken in the proceeding · they leave it to Spatialinfo and its solicitors to determine the conduct of the proceeding in Spatialinfo's own interests · they have never instructed, and do not instruct, Middletons · putting the funding agreement to one side, there is no agreement by which they seek to achieve control over the proceeding · the funders are aware that if they were in reality making decisions critical to the litigation, the court would probably find there was an abuse of process and stay the proceeding, which would result in the funders losing the money that had been paid under the agreement. 36 Mr Bowman's evidence was that the funders had no involvement in the appointment of Spatialinfo's solicitors. They did not recommend Middletons to Spatialinfo. There is no agreement between them and Middletons. Mr Dobbie's evidence is that · the retainer agreement already produced to Telstra is the only agreement between Spatialinfo and the firm in relation to the proceeding · he advised Spatialinfo to obtain independent advice before entering into the funding agreement · he has at all times received instructions from Spatialinfo and acted solely in its interests · he has never received instructions from the funders, and they have never attempted to influence the conduct of the proceeding. 37 Mr Cotter's evidence was that · he made the decision to retain Middletons · he and Peter Mitchell are the only persons who instruct Middletons · he acted on Mr Dobbie's recommendation to obtain legal advice before entering into the funding agreement · the funders have never required him to take any step in the proceeding · they have never threatened to withdraw funding. The evidence of Mr Bowman, Mr Dobbie and Mr Cotter was not challenged, and I accept it. 38 Apart from the provisions of the funding agreement dealt with at [31]‑[34], Telstra relied on the fact that Messrs Bowman and McLernon had extensive experience as commercial litigators. I was invited to infer from this that they would seek to control the litigation. I do not draw the suggested inference. I prefer Mr Bowman's evidence outlined above. 39 The following passages from an IMF presentation in December 2004 by John Walker, IMF's managing director, are relied upon by Telstra: "2.1(e) IMF does not do any legal work. Executives of the company are required to give up their legal practising certificate upon joining the company. The business model is that IMF will have a close relationship with three or four legal firms in each state who will carry out a large part of the litigation funded by IMF. If a particular client requests a particular lawyer then, in most cases, that lawyer will be appointed." Under the heading "IMF's Due Diligence Process", it is said that IMF investigates the value of the claim by reference to six factors, one of which is "The claimant": "Is the claimant someone who IMF is prepared to have in control of the project in circumstances where the controller takes minimal risks associated with the project?" Under the heading "Funding Agreement" appears "(e) … after a successful settlement or judgment, IMF is paid out the amount it has actually expended and then receives between 30% and 40% of the recoveries." Under the heading "Services Provided" appears: "(b) Any business which simply provides funding for litigation is destined to fail. IMF must be involved in the decision making, strategy, investigation and negotiation. … (e) Under the supervision of the solicitors IMF investigators will often be responsible for gathering the evidence in relation to the particular case (the company carries appropriate licences for this work). … (h) IMF oversees the activities of the solicitors and ensures that time lines, budgets and court orders are met, although ultimately control always remains with the client. (i) IMF executives will often be involved in the major strategic moves during the course of the litigation." 40 The presentation is an overview of the funders' business. For the most part it is expressed in general terms. Thus, for example, the funders' executives "will often be involved in the major strategic moves during the course of the litigation". IMF investigators "will often be responsible for gathering evidence". The evidence in the present case does not disclose any such involvement or activity. I accept Mr Bowman's evidence that the funding agreement was drafted so as to avoid the pitfalls disclosed by Clairs Keeley, and that it has been adhered to by the funders. That evidence, directed to this particular transaction, is greatly to be preferred to the general statements in Mr Walker's presentation. 41 So the position is that Telstra is unable to point to anything other than the funding agreement to make out a case of an abuse of process. In the light of the agreement and the evidence that it has been complied with, no "devil in the detail" has been exposed. Since the mere existence of the funding agreement does not make a case of abuse, I would have concluded that the subpoenas are an attempt to discover whether Telstra has a case at all, and not to elicit evidence in support of a case that it has. It seeks to discover material that will enable it to raise allegations of fact that, despite the terms of the funding agreement and the evidence, there is an impermissible level of control exercised by the funders or that Middletons are not acting solely in the interests of and on the instructions of Spatialinfo. Given that the existence of the funding agreement is insufficient itself to establish impermissible maintenance or an abuse of process, and that the evidence comprehensively establishes that there is no other agreement, arrangement or conduct governing the relationship between Spatialinfo and either its funders or its solicitors, that is fishing in the sense described in Small and WA Pines. See especially WA Pines at 191 per Lockhart J. If the fishing allegation is to be determined in accordance with the distinction drawn in those cases, I would have set the subpoenas aside. 42 However, the introduction in 1988 of Order 15A rule 6 of the Rules of Court has rendered less obnoxious the notion of fishing as understood in the earlier cases. The rule provides that where "(a) there is reasonable cause to believe that the applicant has or may have the right to obtain relief in the Court from a person whose description has been ascertained; and (b) after making all reasonable inquiries, the applicant has not sufficient information to enable a decision to be made whether to commence a proceeding in the Court to obtain that relief; and (c) there is reasonable cause to believe that that person has or is likely to have or has had or is likely to have had possession of any document relating to the question whether the applicant has the right to obtain the relief and that inspection of the document by the applicant would assist in making the decision – the Court may order that that person shall make discovery to the applicant of any document of the kind described in paragraph (c)." 43 In Caltex Refining Co Pty Ltd v Amalgamated Metal Workers Union (1990) 51 IR 113 at 116 Burchett J, with whom Lockhart and Gummow JJ agreed, said: "This [fishing] objection to applications for discovery of documents does not now have the weight it was once thought to have. Perhaps it should be seen as a metaphor with more colour than substance. Modern procedures actually provide as something desirable for what might once have been criticised as fishing ‑ see O 15A of the Rules of this Court, particularly r 6. It would be ironic if the Court refused an applicant, on this basis, discovery after action, when discovery could have been obtained (at the expense of incurring extra costs) by an application before action. Discovery should be controlled, and may be limited to documents relevant to particular issues, but it is a valuable weapon in an armoury of justice. The real objection which, in some cases, justifies discovery being limited to particular issues is the objection of oppression." 44 In Treasurer of the Commonwealth of Australia v CanWest Global Communications Corp [1997] FCA 578 a Full Court (Beaumont, Burchett and Emmett JJ) approved Burchett J's observations in Caltex, and added: "Order 15A rule 6 … takes, as a sufficient starting point for an order for discovery before action, a situation where 'there is reasonable cause to believe that the applicant has or may have the right to obtain relief'. (Emphasis added.) The power to order discovery in a case actually pending in the Court can hardly be less extensive than the power which may be used to gain discovery for the benefit of a person who is without evidence even to mount a case, and so resorts to Order 15A." 45 In Bailey v Beagle Management Pty Ltd (2001) 105 FCR 136 a Full Court (Heerey, Branson and Merkel JJ) applied this approach to a notice to produce. Their Honours at [31] said that "often a holding that interlocutory process is fishing on closer examination appears to be more a question of oppression". 46 On the approach taken in the cases considered above, the funders' undoubted fishing expedition is not obnoxious. Oppression 47 In Trade Practices Commission v Arnotts Ltd (No 2) (1989) 88 ALR 90 at 102‑103 Beaumont J said: "The issue of a subpoena will be an abuse of process if it is not used for a legitimate forensic purpose …. But, as Deane and Gaudron JJ observed in Hamilton v Oades (1989) 85 ALR 1 at 11, the Court's general powers in this area have a dual aspect: 'The inherent power of a court to control and supervise proceedings includes the power to take appropriate action to prevent injustice … [This] power ... is not restricted to defined and closed categories. ... In this context injustice is not simply a question of the purpose or motive for which the relevant proceedings were instituted but includes a consideration of the consequences of the proceedings for the person invoking the power. The terms 'oppressive' and 'vexatious' are often used to signify those considerations which justify the exercise of the power to control proceedings to prevent injustice, those terms respectively conveying, in appropriate context, the meaning that the proceedings are 'seriously and unfairly burdensome, prejudicial or damaging' and 'productive of serious and unjustifed trouble and harassment' …. In other words, the present inquiry is not limited to an analysis of the true purpose of Arnotts in procuring the issue of the subpoena. It is also material to look at the impact of the subpoena upon Mattingly. Without restricting this inquiry, it is convenient to address the present application in the first instance by reference to two questions: (1) Does the material sought have an apparent relevance to the issues in the principal proceedings, ie, is adjectival, as distinct from substantive, relevance established? Does the subpoena have a legitimate forensic purpose to this extent? This involves a consideration of the matter from the standpoint of Arnotts. (2) Is the subpoena seriously and unfairly burdensome or prejudicial? This is to look at the matter from the point of view of Mattingly." 48 Mr Bowman's evidence discloses: (a) that Spatialinfo and IMF executed a confidentiality agreement in relation to each others' confidential documents and information. The documents include · correspondence between the funders and Spatialinfo prior to entry into the funding agreement in response to Spatialinfo's request for funding, relating to the proceeding and its funding · documents of, and internal correspondence created by, the funders concerning their analysis of the proceeding and funding based on, amongst other things, Spatialinfo's analysis of its case against Telstra and discussions with Spatialinfo's directors and legal advisers about the proceeding · the funders' file notes of discussions between them and Spatialinfo and between them, Spatialinfo and its legal advisers concerning the proceeding · correspondence between the funders and Clayton Utz and Spatialinfo (or any two) concerning arrangements for the payment of Clayton Utz's past fees · correspondence between the funders, Spatialinfo and Middletons (or any two) concerning Middletons' estimated costs of conducting the proceeding · correspondence between the funders, Spatialinfo and Middletons (or any two) concerning the proceeding, in particular in relation to Telstra's security for costs application · correspondence between the funders, Spatialinfo and Middletons (or any two) concerning Middletons' bills in relation to the proceeding; (b) that the documents sought by the subpoenas contain confidential information which, if produced, would provide Telstra with a significant forensic advantage in the proceeding, unrelated to Telstra's motion. These documents include the documents referred to in (a), together with documents dealing with issues for discussion identified by the funders, evidence gathered to support Spatialinfo's case, summaries of that evidence, a detailed task list identifying how Spatialinfo and Middletons propose to prepare Spatialinfo's case, the names of possible expert witnesses, detailed estimates of costs, and analysis of Spatialinfo's quantum claim, and (c) that the forensic advantage referred to in (b) increases the risk that Spatialinfo's proceeding will not be successful, with the consequence that the funders will not obtain a share of the proceeds of the litigation and will have to pay both Spatialinfo's and Telstra's costs. 49 Although not directly deposed to by Mr Bowman, the provision of documents pursuant to the subpoenas would potentially discourage Spatialinfo from disclosing further confidential information to the funders in the course of the proceeding, because of the prospect that Telstra might serve further subpoenas on them or seek non‑party discovery. Mr Bowman's evidence discloses that it is essential for the funders' business that throughout the post‑funding period the entities it funds must continue to provide full and frank disclosure about the proceedings, in particular as to matters that impact on the funders' risk. If Spatialinfo were not to continue to provide confidential information, it would significantly increase the funders' risk in funding the proceeding. 50 Mr Bowman's evidence is that the funders will also suffer in the ongoing conduct of their business if required to comply with the subpoenas as: (a) the funding of new matters would be significantly curtailed, because potential seekers of litigation funding would not wish to disclose confidential information if the funders were obliged to produce it to the defendant/respondent, and (b) entities that do seek funding may not be prepared to provide the full and frank disclosure of information that is vital to the funders' assessment of the risks of funding litigation, thus resulting in either the rejection of applications or the provision of funding based on less information than is desirable. 51 The fact that documents sought by a subpoena are alleged to be confidential is not, by itself, a reason to set aside the subpoena: Re ACI International Ltd (1986) 11 ACLR 240. However, in determining whether a subpoena operates oppressively, it is appropriate to take into account a confidentiality claim. In Apache Northwest Pty Ltd v Western Power Corporation (1998) 19 WAR 350 at 380‑381 the Full Court of the Supreme Court of Western Australia said: "… although, standing alone, confidentiality is not a ground for refusing to issue, or for setting aside, a subpoena, it is a factor which is to be taken into account, together with those tests for oppression which are determined by reference to the breadth of the subpoena, the definition of documents involved and the type and degree of burden placed upon those to whom the subpoena is addressed." The Court also referred to the existence of mechanisms for preserving confidentiality. 52 The evidence summarised at [48] to [50] discloses, and I find, that production of the documents sought by the subpoenas · will involve a breach by IMF of its obligations under the confidentiality agreement · will result in the disclosure to Telstra of the funders' own confidential documents · will provide Telstra with a significant forensic advantage in the proceeding, unrelated to Telstra's motion, which will increase the risk that Spatialinfo will be unsuccessful in its proceeding, to the funders' detriment · is likely to discourage Spatialinfo from disclosing further confidential information to the funders, thus increasing their risk in funding the proceeding · will result in the curtailment of the funders' funding of new matters, because potential seekers of funding will not wish to disclose confidential information if the funders are obliged to produce it to their opponents in the litigation · is likely to result in those who do in the future seek funding not being prepared to provide the full and frank disclosure that is vital to the funders' assessment of the risks of funding the litigation. 53 In disputes between commercial competitors, courts can implement measures to protect sensitive confidential information, often by restricting access to legal representatives. See for example Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34 at 40. That device will not protect the funders. Any access obtained by Telstra's legal representatives will significantly benefit Telstra's defence of the proceeding and correspondingly prejudice Spatialinfo and thus the funders. The confidential information is sensitive precisely because it involves, inter alia, assessments of Spatialinfo's claim against Telstra and consideration of strategic matters related to the conduct of the proceeding. 54 In view of the foregoing, I have concluded that the subpoenas are "seriously and unfairly burdensome, prejudicial or damaging" to the funders, and are thus "oppressive" in the sense in which that word is used in Hamilton v Oades (1989) 166 CLR 486 and Arnotts. What the funders rely upon as fishing, in my view compounds the oppression that otherwise exists. By the time of the hearing Telstra was in possession of the funders' and Spatialinfo's affidavit material confirming the contents of the funding agreement (ie that it was being implemented in accordance with its terms) and that Spatialinfo's solicitors were not subject to direction or threat. Nevertheless, without attempting to test that evidence, Telstra persisted with its motion. NOTICES TO PRODUCE 55 Order 33 rule 12 of the Rules of Court requires a party served with a notice to produce documents, to produce them "unless the Court otherwise orders". In Bailey at [24] a Full Court said that in determining whether a notice to produce should be set aside, the Court will consider the extent to which the notice might be fishing, vexatious, oppressive or inappropriate for any other reason. THE SECOND NOTICE TO PRODUCE 56 Although not in exactly the same form as the subpoenas, the categories of documents required to be produced by the second notice to produce are substantially the same as those covered by the subpoenas. The evidence summarised at [48] to [50] discloses, and I find, that production of the documents sought by the second notice to produce · will involve a breach by Spatialinfo of its obligations under the confidentiality agreement · will result in the disclosure to Telstra of Spatialinfo's own confidential documents · will provide Telstra with a significant forensic advantage in the proceeding, unrelated to Telstra's motion, which will increase the risk that Spatialinfo will be unsuccessful in its proceeding · may discourage Spatialinfo from disclosing further confidential information to the funders, thus incurring the risk that the funders will terminate the funding. 57 What I have said at [53] about the funders is applicable to Spatialinfo as well. 58 The second notice to produce is thus "seriously and unfairly burdensome, prejudicial or damaging" to Spatialinfo and is thus "oppressive". What I have said in the later part of [54] is applicable here. THE THIRD NOTICE TO PRODUCE 59 In [21] I gave a brief description of the demands made by the third notice to produce. It is now necessary to amplify that description in relation to the fourth to thirteenth categories of documents sought by that notice. The presently relevant parts of Mr Dobbie's affidavit can be summarised as follows: (a) on 20 May 2004 he received instructions from Spatialinfo's officers to take over the conduct of the proceeding from Clayton Utz; (b) he subsequently advised the officers to obtain independent legal advice as to the proposed funding agreement; (c) he advised the officers that the involvement of a funder may constitute illegal maintenance, that to avoid that possibility it was important that the funders not have any control over his firm's conduct of the proceeding, that Spatialinfo and not the funders should provide him with instructions, that while it was acceptable for Spatialinfo to update the funders on the progress of the proceeding and for them to provide suggestions on specific strategic steps, Spatialinfo should at all times form its own view as to how best to conduct the proceedings, and that the funders should not seek to interfere with his conduct of the proceeding; (d) on 24 May Mr Dobbie attended a conference in Spatialinfo's counsel's chambers to receive a briefing from Clayton Utz; (e) between 2 June and 2 July Mr Dobbie had discussions with Mr Bowman concerning the likely interlocutory steps and the possible costs of the proceeding; (f) on 25 August and 10 September Mr Dobbie attended a conference with Spatialinfo's counsel, its officers and Mr Bowman at which counsel updated Mr Bowman on the progress of the proceeding; (g) on 8 and 9 November Mr Dobbie had discussions with Mr Bowman about Telstra's application for security for costs; (h) on 12 and 19 November Mr Dobbie had discussions with Mr Bowman and Spatialinfo's officers concerning queries about his firm's invoices; (i) on 12 November Mr Dobbie discussed "the position" (semble as to security for costs) with Mr Bowman, and (j) on three dates in December 2004 Mr Dobbie had discussions with Mr Bowman concerning Telstra's motion for production of the funding agreement and related documents from Spatialinfo and the funders, and Telstra's stay application. 60 Paragraphs 4 to 13 of the third notice to produce seek production of "records" of the advice, the conferences and the discussions referred to in each of (a) to (j) above. 61 Telstra applied for a stay of the proceeding on the ground that the funders are illegally maintaining it, and issued subpoenas and notices to produce to elicit information to assist it to prove its case for a stay. In response to a notice to produce directed to Spatialinfo, Mr Dobbie's affidavit is designed to show that his firm is not being instructed by the funders, but solely by Spatialinfo. Telstra now seeks documents recording the instructions received by Mr Dobbie from Spatialinfo, advice given by him to his client, discussions at a conference in Spatialinfo's counsel's chambers, discussions between Mr Dobbie and Mr Bowman on various occasions about the progress of the proceeding and interlocutory steps being taken, and discussions between Mr Dobbie, Mr Bowman and Spatialinfo's directors about the firm's fees. 62 In the circumstances outlined, those demands are prejudicial and damaging to Spatialinfo and are oppressive. Assuming they exist, the records sought will include records of legal advice, confidential discussions, and what was said at conferences about the conduct of Spatialinfo's case (including interlocutory proceedings). It would in my view be extraordinary if Spatialinfo had no protection against being required to hand to its opponent in litigation documentary information of such a character. So far as the notice relates to Spatialinfo's instructions, the advice given to the client and the conference at which Clayton Utz briefed Mr Dobbie about the proceeding, legal professional privilege provides protection. While the privilege is usually asserted at the production of documents stage, there is authority that a subpoena or notice to produce can in an appropriate case be set aside on the ground that documents sought are highly likely to be privileged. See Pollack v Retravision (NSW) Ltd [1996] FCA 1124 at 8. 63 Spatialinfo made no submissions about the documents sought by pars 1 to 3 of the third notice to produce, and in those circumstances I see no reason why that part of the notice should not be complied with. THE FIRST NOTICE TO PRODUCE 64 The three areas of the funding agreement that have been redacted are (a) the sum of Clayton Utz's past costs and disbursements incurred prior to the agreement (clause 1.1) (b) the amounts of the costs in (a) that the funders will pay, and the dates on which they will pay them (clause 2.4), and (c) the multiple of the costs paid by the funders, or the percentage of any Resolution Sum received by Spatialinfo, that the funders will be paid (clause 6.1). 65 I do not regard Clayton Utz's past costs as sufficiently relevant to Telstra's motion to require their disclosure. Thus redactions (a) and (b) need not be produced. The amounts in (c) are in my view relevant to Telstra's motion. The quantum of the funders' remuneration goes to whether Spatialinfo will benefit from a successful outcome of the proceeding. See the third matter listed in [25]. The amounts in (c), as well as those in (a) and (b), were said by Spatialinfo to be subject to legal professional privilege. I need only deal with this claim in relation to the amounts in (c). Reliance is placed on Re Global Medical Imaging Management Ltd (2001) 38 ACSR 214 and Apple Computer Australia Pty Ltd v Wily [2002] NSWSC 855. In each of those cases it was held that the funding agreement in question was subject to privilege under s 119 of the Evidence Act 1995 (NSW). The question under that section was whether the agreement was prepared for the "dominant purpose of the client being provided with professional legal services relating to [a] proceeding". It was held that it was, on the ground that there was an inextricable connection between the liquidator's entry into a funding agreement for legal proceedings and his capacity to effectively continue with that proceeding. 66 The counterpart to s 119 in the Evidence Act 1995 (Cth) does not apply to pre‑trial discovery: Esso Australia Resources Ltd v Federal Commissioner of Taxation (1999) 201 CLR 49 at 64. The common law applies, under which the question would be whether the agreement was created for the dominant purpose of being used in existing or anticipated litigation. See Cook v Pasminco Ltd (No 2) (2000) 107 FCR 44 at 52. I say that "would be" the question, because no claim of privilege is made in respect of the agreement as a whole. It is only the redacted parts in respect of which privilege is claimed. But it is appropriate to consider whether the agreement would be privileged, because if it is not, then specific parts of it cannot be. The first difficulty in Spatialinfo's claim is that there is no evidence that the agreement was created for use in litigation. Accordingly the claim fails in limine. If I were to speculate as to the purpose for which the agreement came into existence, I would conclude that it was not created for the purpose of being used "in litigation", though it was to be used in order to obtain funds to finance litigation, which is a different thing. However it is not necessary to decide this point for, as I have said, Spatialinfo has not gone into evidence on the purpose issue. 67 Further, the issue here relates only to parts of the remuneration clause in the agreement. It cannot in my view be said that that was created for the purpose of being used in legal proceedings, let alone for the dominant purpose of such use. The funders' remuneration was doubtless negotiated between them and Spatialinfo, and was included in the agreement so the parties would have a record of their bargain. That has nothing to do with the conduct of the current litigation. 68 Although I have held that Clayton Utz's past costs are not relevant to the proceeding, and so the redacted parts relevant to those matters need not be produced, for the reasons I have given in relation to (c) in [64], I would have dismissed the claim to privilege in relation to (a) and (b) in [64] had I been of the view that those matters were relevant to the proceeding. 69 In support of its privilege claim Spatialinfo relied on cases involving liquidators' funding agreements in which the court permitted redactions to be made: Re Kingsheath Club of the Clubs Ltd [2003] FCA 1034, Re Addstone Pty Ltd [1998] FCA 1568 and Elfic Ltd v Macks [2000] QSC 18. Kingsheath is the leading case, and the one that affords most assistance to Spatialinfo. There the redactions related to the amounts and level of funding to be provided and the return to the funders. In explaining his reasons for ordering the redactions, Goldberg J said at [33]‑[34]: "In an ordinary litigation situation, leaving aside any issue as to security for costs, a litigant is not normally privy to the 'war chest' that the opposing party has available to fund the litigation. Although the applicants, as creditors, have an interest in the financial commitments and obligations entered into by the liquidator, it would give them an unfair advantage in any litigation brought by the liquidator against them for them to have knowledge of the amount of money available to the liquidator to run the litigation. They would, by virtue of that knowledge, have a tactical and strategic advantage which ought not to be given to them. … There is a real risk that disclosure of the amount of funding available to the liquidator to proposed defendants in proposed litigation would frustrate or impede the purpose of the liquidator's application for the court's approval to enter into a funding agreement. It may enable the proposed defendants to assess and implement the extent to which they could, by way of interlocutory processes, eat up the liquidator's funding before the conclusion of the trial." 70 His Honour noted at [27] that the liquidator did not claim legal professional privilege in respect of the funding agreement. Spatialinfo did not explain how a case that is not about legal professional privilege could support its claim to privilege. 71 It will have been observed that while the passage set out at [69] explains how disclosure of the amounts and levels of funding could unfairly assist the defendants, it does not explain how knowledge of the return to the funders could have that effect. 72 I note in passing that the "war chest" notion has no application to the present agreement. Under clause 6 of the funding agreement the funders agree to fund the litigation (Spatialinfo's costs, costs orders in favour of Telstra and security for costs) until termination on an uncapped basis. 73 In the circumstances I have not found Kingsheath or the other cases of assistance in resolving the legal professional privilege claim. Spatialinfo should produce the remuneration provision. CONCLUSION 74 The result of the foregoing is that the subpoenas will be set aside, the second notice to produce will be set aside, and paras 4 to 13 of the third notice to produce will be set aside. As to the first notice to produce, I will declare that Spatialinfo is obliged to produce an unmasked copy of clause 6.1 of the funding agreement. I certify that the preceding seventy-four (74) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg. Associate: Dated: 22 April 2005 Counsel for the Applicant: PJ Jopling QC and PH Wallis Solicitors for the Applicant: Middletons Counsel for the Respondent: JBR Beach QC and WA Harris Solicitors for the Respondent: Freehills Counsel for IMF (Australia) Ltd and Insolvency Litigation Fund Pty Ltd SJ Gageler SC and MA O'Brien Solicitors for IMF (Australia) Ltd and Insolvency Litigation Fund Pty Ltd Ebsworth & Ebsworth Date of Hearing: 4-5 April 2005 Date of Judgment: 22 April 2005