Hanks v Admiralty Resources NL (No 2) [2011] FCA 1464

FEDERAL COURT OF AUSTRALIA

Hanks v Admiralty Resources NL (No 2) [2011] FCA 1464 Citation: Hanks v Admiralty Resources NL (No 2) [2011] FCA 1464

Parties: DAVID JOHN HANKS v ADMIRALTY RESOURCES NL (ACN 101 195 972)

File number: VID 606 of 2011

Judge: GORDON J

Date of judgment: 16 December 2011

Date of hearing: Determined on the papers

Date of last submissions: 12 December 2011

Place: Melbourne

Division: GENERAL DIVISION

Category: No catchwords

Number of paragraphs: 26

Solicitor for the Plaintiff: Slater & Gordon

Solicitor for the Defendant: Hall & Wilcox

IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 606 of 2011

BETWEEN: DAVID JOHN HANKS

Plaintiff

AND: ADMIRALTY RESOURCES NL (ACN 101 195 972)

Defendant

JUDGE: GORDON J DATE OF ORDER: 16 DECEMBER 2011 WHERE MADE: MELBOURNE

THE COURT ORDERS THAT:

1. The Interlocutory Application dated 30 November 2011 is dismissed. 2. The Plaintiff pay the Defendant's costs of the Application, such costs to be taxed in default of agreement. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 606 of 2011

BETWEEN: DAVID JOHN HANKS

Plaintiff

AND: ADMIRALTY RESOURCES NL (ACN 101 195 972)

Defendant

JUDGE: GORDON J DATE: 16 DECEMBER 2011 PLACE: MELBOURNE

REASONS FOR JUDGMENT

INTRODUCTION 1 By Orders made on 8 August 2011 (the Orders), the plaintiff, Mr Hanks, and his solicitors were authorised under s 247A of the Corporations Act 2001 (Cth) (Corporations Act) to inspect identified books of the defendant, Admiralty. 2 Relevantly, Category 5 of the Orders permitted the inspection of documents relied on by Admiralty's directors to make statements to the Australian Stock Exchange (ASX), and at the Extraordinary General Meeting of Admiralty held on 29 October 2010 (EGM), that the offer by Hebei Wefeng Iron & Steel Co Ltd (HWF) was "not a superior offer" to that made by Icarus Derivatives Ltd (Icarus), for the sale of Admiralty's controlled entity, Vallenar Iron Company. 3 In relation to Category 5 of the Orders, on 24 August 2011 Admiralty's solicitors informed Mr Hanks' solicitors that apart from a redacted minute of a directors' meeting dated 27 October 2010 (which had been produced in the course of defending the application for inspection under s 247A of the Corporations Act and was disclosed under Category 1 of the Orders), and a memorandum of advice to Admiralty from its solicitors dated 27 October 2010 (in respect of which legal professional privilege was claimed) (the Advice), Admiralty had no books falling within Category 5 of the Orders. 4 On 30 September 2011, Mr Hanks' solicitors wrote to Admiralty's solicitors seeking production of the Advice on the grounds that: 1. Admiralty had, by its reliance on the Advice at the EGM and in its subsequent presentation to shareholders at the Annual General Meeting of Admiralty held on 30 November 2010 (AGM), waived privilege in the Advice; and 2. even if privilege had not been waived: 2.1 it was not a requirement that an order under s 247A of the Corporations Act be framed to exempt from its ambit anything in respect of which legal professional privilege either subsisted or was claimed; 2.2 the Orders did not exclude documents subject to a claim for legal professional privilege; 2.3 the existence of the Advice and the relevance of it to the matters the subject of the investigation for which access to Admiralty's books was granted, was squarely within contemplation in the application for inspection; 2.4 no objection was taken at the application for inspection to producing privileged documents; 2.5 the privilege protected communications between Admiralty and its solicitors, not between its solicitors and Admiralty's directors. Mr Hanks had been granted access to Admiralty's books solely for the purpose of assessing whether or not to pursue an action against Admiralty's directors under Pt 2F.1A of the Corporations Act. Such an action would be brought on behalf of Admiralty itself and Mr Hanks accessing the advice would not abrogate legal professional privilege; and 2.6 the Orders provided that Mr Hanks not communicate or disclose information obtained as a result of the inspection to any persons except to his legal advisers and such other persons necessary to enable him to determine whether to apply for leave pursuant to s 237 of the Corporations Act. Accordingly, the terms on which access had been granted were consistent with the maintenance of privilege. 5 On 17 October 2011, Admiralty's solicitors informed Mr Hanks' solicitors that Admiralty would not produce the Advice and that privilege had not been waived. 6 By interlocutory process dated 30 November 2011, Mr Hanks seeks an order permitting him to inspect the Advice. It is common ground that the Advice is privileged. 7 The questions that arise for determination on this application are: 1. whether Admiralty has waived privilege in the Advice; 2. alternatively, whether an Order made under s 247A of the Corporations Act must exclude from its ambit any document in respect of which a claim to legal professional privilege is validly made; 3. if the answer to (2) above is no, whether as a matter of discretion Mr Hanks should be permitted to inspect the Advice. For the reasons that follow, the answer to each question is "No".