FEDERAL COURT OF AUSTRALIA Burrup Fertilisers Pty Ltd (Receivers and Managers Appointed) v Oswal (No 7) [2012] FCA 1185 Citation: Burrup Fertilisers Pty Ltd (Receivers and Managers Appointed) v Oswal (No 7) [2012] FCA 1185 Parties: BURRUP FERTILISERS PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (ACN 095 441 151) v PANKAJ OSWAL, RADHIKA OSWAL, COMICAL ALI MILITANT VEGETARIAN PTY LTD (ACN 129 299 172) and OSWAL INDUSTRIAL PTY LTD (ACN 121 121 659) File number: WAD 66 of 2011 Judge: BARKER J Date of judgment: 30 October 2012 Catchwords: PRIVILEGE – whether emails subject to common law legal professional privilege – third parties – agency – waiver of confidentiality Cases cited: Attorney-General for the Northern Territory v Maurice (1986) 161 CLR 475 Australian Rugby Union Ltd v Hospitality Group Pty Ltd [1999] FCA 1061; (1999) 165 ALR 253 Australian Securities and Investments Commission v Australian Lending Centre Pty Ltd (No 2) [2011] FCA 1057; (2011) 283 ALR 299 AWB Limited v Honourable Terence Rhoderic Hudson Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30 Carnell v Mann (1998) 89 FCR 247 Commissioner of Australian Federal Police v Propend Finance Pty Limited (1997) 188 CLR 501 Dalleagles Pty Limited v Australian Securities Commission (1991) 6 ACSR 498 ESSO Australia Resources Limited v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49 Exequatur Pty Ltd & Ors v Advanced Components and Peripherals Pty Ltd [1999] VSC 547 Franks v Warringah Council [2010] NSWSC 1318 Grant v Downs [1976] HCA 63; (1976) 135 CLR 674 In the Matter of ACN 005 408 462 Pty Ltd (formerly TEAC Australia Pty Ltd) [2008] FCA 964 Jones v Dunkel (1959) 101 CLR 298 Kennedy v Wallace [2004] FCAFC 337; (2004) 142 FCR 185 Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1 Pratt Holdings Pty Ltd v Commissioner of Taxation [2004] FCAFC 122; (2004) 136 FCR 357 R v Bell; Ex parte Lees (1980) 146 CLR 141 Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2006] NSWSC 234 Schellenberg v Tunnel Holdings Pty Limited [2000] HCA 18; 200 CLR 121 State of New South Wales v Betfair Pty Ltd [2009] FCAFC 160; (2009) 180 FCR 543 State of New South Wales v Jackson [2007] NSWCA 279 The Attorney-General for the Northern Territory of Australia v Kearney (1985) 158 CLR 500 Waterford v The Commonwealth of Australia (1987) 163 CLR 54 Date of hearing: 13 April 2012 Place: Perth Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 76 Counsel for the Applicant: Mr K de Kerloy with Mr P Sadleir Solicitor for the Applicant: Herbert Smith Freehills Counsel for the Second Respondent: Mr T Caspersz Solicitor for the Second Respondent: Jones Day IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 66 of 2011 BETWEEN: BURRUP FERTILISERS PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (ACN 095 441 151) Applicant AND: PANKAJ OSWAL First Respondent RADHIKA OSWAL Second Respondent COMICAL ALI MILITANT VEGETARIAN PTY LTD (ACN 129 299 172) Third Respondent OSWAL INDUSTRIAL PTY LTD (ACN 121 121 659) Fourth Respondent BETWEEN: RADHIKA OSWAL First Cross-Claimant PANKAJ OSWAL Second Cross-Claimant AND: AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED (ACN 005 357 522) First Cross-Respondent ANZ FIDUCIARY SERVICES PTY LTD (ACN 100 709 493) Second Cross-Respondent IAN MENZIES CARSON Third Cross-Respondent DAVID LAURENCE MCEVOY Fourth Cross-Respondent SIMON GUY THEOBALD Fifth Cross-Respondent BURRUP HOLDINGS PTY LIMITED (ACN 097 138 353) Sixth Cross-Respondent BURRUP FERTILISERS PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (ACN 095 441 151) Seventh Cross-Respondent JUDGE: BARKER J DATE OF ORDER: 26 OCTOBER 2012 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. Documents 1-13 in an annexure A to the interlocutory application filed on behalf of the second respondent on 3 February 2012 produced pursuant to the subpoenas for production addressed to the following entities: (i) Design Management Group Pty Ltd; (ii) DMG Construction (WA) Pty Ltd; and (iii) Limited Edition Luxury Homes Pty Ltd are privileged on the basis that they are subject to legal professional privilege pursuant to the common law. 2. The applicant pay the second respondent's costs of the application, to be taxed if not agreed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 66 of 2011 BETWEEN: BURRUP FERTILISERS PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (ACN 095 441 151) Applicant AND: PANKAJ OSWAL First Respondent RADHIKA OSWAL Second Respondent COMICAL ALI MILITANT VEGETARIAN PTY LTD (ACN 129 299 172) Third Respondent OSWAL INDUSTRIAL PTY LTD (ACN 121 121 659) Fourth Respondent OSWAL INDUSTRIAL PTY LTD (ACN 121 121 659) Fourth Respondent BETWEEN: RADHIKA OSWAL First Cross-Claimant PANKAJ OSWAL Second Cross-Claimant AND: AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED (ACN 005 357 522) First Cross-Respondent ANZ FIDUCIARY SERVICES PTY LTD (ACN 100 709 493) Second Cross-Respondent IAN MENZIES CARSON Third Cross-Respondent DAVID LAURENCE MCEVOY Fourth Cross-Respondent SIMON GUY THEOBALD Fifth Cross-Respondent BURRUP HOLDINGS PTY LIMITED (ACN 097 138 353) Sixth Cross-Respondent BURRUP FERTILISERS PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (ACN 095 441 151) Seventh Cross-Respondent JUDGE: BARKER J DATE: 26 OCTOBER 2012 PLACE: PERTH REASONS FOR JUDGMENT RULING ON LEGAL PROFESSIONAL PRIVILEGE CLAIMS 1 In the course of this proceeding the applicant (BFPL) caused subpoenas for production of documents to be served on three entities, Design Management Group Pty Ltd, DMG Construction (WA) Pty Ltd and Limited Edition Luxury Homes Pty Ltd. The second respondent (who is also cross-claimant) (Mrs Oswal) by interlocutory application filed 3 February 2012 seeks orders that the documents identified by numbers 1-13 in annexure A to the interlocutory application and produced pursuant to the subpoenas are subject to legal professional privilege under the common law. SOME GENERAL PRINCIPLES 2 The general principles applicable when determining a claim for legal professional privilege in this Court in a case such as the present are not in dispute between the parties. 3 The common law applies in relation to an objection to the production of documents in a proceeding in this Court on the ground of legal professional privilege: ESSO Australia Resources Limited v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49 (ESSO); Australian Securities and Investments Commission v Australian Lending Centre Pty Ltd (No 2) [2011] FCA 1057; (2011) 283 ALR 299 at [9]. 4 In ESSO, the High Court by a majority held that the test at common law for legal professional privilege in relation to documents is whether a communication was made or a document was prepared for the dominant purpose of a lawyer providing legal advice or legal services and that test should be applied to the discovery and inspection of confidential written communications between lawyer and client. To that end the earlier decision of the Court in Grant v Downs [1976] HCA 63; (1976) 135 CLR 674 (Grant v Downs) establishing, by a majority, the sole purpose rule. 5 There may also be a separate category of document that is privileged because it has the purpose of providing legal assistance, for example, draft conveyances and the like: Dalleagles Pty Limited v Australian Securities Commission (1991) 4 WAR 325; (1991) 6 ACSR 498 at 505. 6 Generally speaking, the authorities have long recognised two broad categories of privilege in this area: legal advice privilege and litigation privilege. See discussion in Pratt Holdings Pty Ltd v Commissioner of Taxation [2004] FCAFC 122; (2004) 136 FCR 357 (Pratt Holdings) at [23], [28]. 7 In this instance the relevant claims to the privilege are capable, at least in the case of documents 1 and 13, to fall within the litigation privilege category on the basis that litigation in relation to the construction of a residential dwelling was a possibility, but in all cases the relevant category would appear to be legal advice privilege on the understanding that it includes the concept of legal assistance mentioned above. 8 The primary relevant inquiry in determining whether a claim for such privilege should be upheld in a case such as the present then is as to the purpose for which each of the relevant documents came into existence. 9 The purpose for which a document is created is a question of fact: Waterford v The Commonwealth of Australia (1987) 163 CLR 54 (Waterford v Commonwealth) at 66, to be determined objectively and from circumstances that existed at the time the document was created: Grant v Downs at 682. Subjective purpose is relevant and may often be decisive: ESSO at [172]. 10 The relevant privilege is that held at the time the document is made and the document does not lose privilege simply because it contains extraneous matter: Waterford v Commonwealth at 66. 11 If a person directs or authorises a third party (an agent) to prepare and then make a documentary communication on that person's behalf to a legal adviser for the dominant purpose of obtaining legal advice, that documentary communication by the agent attracts legal professional privilege: Australian Rugby Union Ltd v Hospitality Group Pty Ltd [1999] FCA 1061; (1999) 165 ALR 253; Pratt Holdings at [39]. 12 It may also be that where a person (a principal) directs or authorises a third party (non-agent) who is not an employee of that person to prepare a documentary communication for the dominant purpose of it being communicated by the principal and not directly by the third party to a legal adviser for the purpose of obtaining legal advice, that documentary communication from the third party to the principal attracts legal professional privilege: see Pratt Holdings at [1]. 13 In Pratt Holdings the Court accepted, at [41], that the important consideration is not the nature of the third party's legal relationship with the principal, but rather, the nature of the function the third party performed for the principal. If the function was to enable the principal to make the communication necessary for the obtaining of the legal advice it required, then legal professional privilege should apply to the communication between the third party and the principal. 14 It is for the person claiming privilege to demonstrate by sufficient evidence, not mere assertion, that the documents are privileged: Kennedy v Wallace [2004] FCAFC 337; (2004) 142 FCR 185 at [12]-[13]. 15 The privilege may be waived but express waiver must be distinguished from implied waiver: Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1 (Mann v Carnell) at [29]. It is the inconsistency between the conduct of the objector and the maintenance of the confidentiality (informed by considerations of fairness) that effects an implied wavier of privilege: Mann v Carnell at [28]-[29]; Attorney-General for the Northern Territory v Maurice (1986) 161 CLR 475. 16 The privilege will not be lost where the privilege holder makes a confidential communication to a third party. The range of circumstances that might give rise to information being considered confidential are broad: Carnell v Mann (1998) 89 FCR 247 at 258-259; State of New South Wales v Jackson [2007] NSWCA 279 at [37]; Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Limited [2006] NSWSC 234 at [33]. 17 The onus of proof in relation to waiver lies on the person asserting the privilege has been waived: State of New South Wales v Betfair Pty Ltd [2009] FCAFC 160; (2009) 180 FCR 543. 18 The Court has power to examine documents over which the privilege is claimed and should not be hesitant to exercise it where there is a disputed claim. The purpose of inspection is to determine whether on its face the nature and content of the document supports the claim for legal professional privilege. For example, communications which facilitate a crime or fraud are not protected by privilege: AWB Limited v Honourable Terrance Rhoderic Hudson Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30 (AWB) at [44]. 19 Put succinctly, there are three interrelated questions in the present case: (1) Was each particular document or communication privileged upon its creation? (2) Was there any subsequent act of waiver in the event it was a privileged communication? (3) Is there anything in the content of the communication which is inconsistent with the protection of privilege? DOCUMENT 1 20 On behalf of Mrs Oswal, the affidavits of lawyers, Mr Michael John Hardy and Mr Malcolm John Harford are primarily relied on to explain the circumstances in which each of the documents in question were created. Mr Hardy's affidavit deals in particular with document 1. 21 By his affidavit filed 15 March 2012, Mr Hardy states that at material times he was a principal of the law firm Hardy Bowen in West Perth. He says that in mid-October 2010 he was instructed by Mr Lindsay Allen, Managing Director of Design Management Group Pty Ltd (DMG) to provide legal advice to Mrs Oswal in relation to the suspension of works (the works) by Limited Edition Luxury Homes Pty Ltd for the construction of Mrs Oswal's property at 2 Bay View Terrace, Peppermint Grove, Western Australia. 22 Mr Hardy says he was aware from his dealings with Mr Allen in relation to the suspension of works that DMG was a firm of architects, that Mr Allen was a qualified architect engaged to provide services in relation to the construction of 2 Bay View Terrace and that Mr Brad Martin was a colleague of Mr Allen at DMG who works with him from time to time. 23 Mr Hardy says that he then sent a letter to Mr Martin, dated 22 October 2010 with an enclosed retainer agreement, which agreement he prepared shortly after receiving document 1, being an email from Mr Allen of DMG to him, which had apparently been copied to Mr Oswal and Mr Martin of DMG. 24 Mr Hardy says he has reviewed his files in relation to the suspension of works at 2 Bay View Terrace and has noted that all communications in relation to the matter were between him and DMG, particularly Mr Allen and Mr Martin, for Mrs Oswal. 25 Mr Hardy says that during the course of his retainer by Mrs Oswal, he assumed due to the fact that Mr Allen and Mr Martin knew that they were dealing with him in his capacity as a lawyer for her, that they would keep confidential all communications for Mrs Oswal that took place between either of them and him. He adds that in light of his duty as a lawyer to keep his client's affairs confidential he would not have communicated with Mr Allen nor Mr Martin otherwise. 26 Mr Hardy also states that he understood, when acting for Mrs Oswal, that Mr Pankaj Oswal was her husband and that 2 Bay View Terrace was going to be the residential premises for the two of them and their family. 27 In light of the evidence of Mr Hardy, which is not challenged in the proceeding, and my perusal of document 1 which was confidentially supplied to me and the parties agreed I should inspect, I am satisfied the email of 19 October 2010 from Mr Allen of DMG to Mr Hardy concerning provision of advice in relation to the suspension of the works (which was apparently copied to Mr Oswal and Mr Martin of DMG), was created for the purpose of obtaining legal advice from Mr Hardy on behalf of Mrs Oswal. 28 I also infer and accept that document 1 was provided to Mr Oswal and to Mr Martin of DMG on the basis that they were authorised agents of Mrs Oswal with a confidential need to be and remained informed in relation to the subject matter of the communication between Mr Allen and Mr Hardy on behalf of Mrs Oswal. 29 In the course of oral argument, counsel for BFPL noted that there was agreement between counsel for the parties as to the general principles that applied in this case but added that the principles were based on public policy. Counsel submitted that the public policy in protecting from disclosure a communication which is otherwise disclosed as having been for the dominant purpose of obtaining legal advice, might yield to the higher public policy, such as that identified in R v Bell; Ex parte Lees (1980) 146 CLR 141, concerning a document identifying the whereabouts of a missing child, and the fraud exception, where the purpose of the communication or the creation of the document constitutes a fraud on justice. 30 When pressed by the Court as to whether document 1 was a document to which the higher public policy contention related, counsel frankly acknowledged that BFPL "would struggle" to maintain the argument in respect of that document. When further pressed, counsel confirmed that the Court could treat document 1 as the subject of legal professional privilege (transcript 14-15). 31 In all these circumstances, the application of Mrs Oswal in respect of document 1 is upheld. It was a communication with a lawyer by a person who, it may reasonably be inferred was the agent of Mrs Oswal, and was made for the purpose of taking legal advice. The fact that the email was copied by Mr Allen to his professional colleague Mr Martin and also Mrs Oswal's husband, Mr Oswal, does not in my view mean either that there was no confidential communication or that there was any waiver of a confidential communication. As discussed in relation to documents 2-13 I consider that both Mr Martin and Mr Oswal were persons who, by reasonable inference, were agents or persons authorised by Mrs Oswal to receive those communications and to keep them confidential in her interests. DOCUMENTS 2-13 32 Counsel for the applicant said that it was documents 2-12 that were very much in issue having regard to the higher public policy contention that the applicant wished to advance. 33 Documents 2-12 involve the law firm Allion Legal Pty Ltd. 34 By his affidavit filed 15 March 2012, Mr Harford states he is a director of Allion Legal Pty Ltd and a principal of Allion Legal in West Perth, where he practices primarily in the commercial and property law areas. 35 Mr Harford states that prior to his retention by Mrs Oswal to provide legal advice in relation to the subject matter of documents 2-12, he had previously been retained by her to provide legal advice in relation to the purchase of nine lots at 2 Bay View Terrace, Peppermint Grove in 2007 and the amalgamation of those lots and the purchase by her as trustee of the Shrikar Trust of farming land at North Dandalup, Western Australia in 2009. 36 Mr Harford says that, for the purpose of doing work for Mrs Oswal pursuant to the earlier property retainers, he communicated directly with Mr Allen and Mr Martin of DMG and those dealings with Mr Allen and Mr Martin included obtaining instructions from them, attending meetings with Mr Allen concerning the purchase of the properties and providing legal advice to Mr Allen and Mr Martin for the benefit of Mrs Oswal in relation to the purchase of the properties. 37 Mr Harford said that all client correspondence in relation to the property retainers was between him, or someone on his behalf at Allion Legal, and DMG including Mr Allen and Mr Martin. 38 Mr Harford says that in December 2010 he was retained by Mrs Oswal to provide legal advice in relation to a proposed mortgage over her properties at 2 Bay View Terrace, Peppermint Grove and 72 Philip Road, Dalkeith. The scope of the mortgage retainer was to: (1) prepare mortgage documentation including a mortgage and discharge of mortgage; (2) provide advice in relation to securing the monies to be advanced in relation to the proposed mortgage; and (3) after he was instructed that the certificates of title could not be found in relation to Mrs Oswal's properties, to apply for replacement certificates of title. 39 Mr Harford says that during the course of doing work for Mrs Oswal for the purpose of the mortgage retainer, he did not speak directly with Mrs Oswal and, with the exception of documents 7 and 8, did not correspond directly with Mrs Oswal. In the case of each of documents 7 and 8, Allion Legal sent the communication directly to Mrs Oswal with copies to Mr Oswal and Mr Allen. Otherwise all communications were between him or someone on his behalf at Allion Legal and DMG, including Mr Allen and Mr Martin. 40 Mr Harford says the purpose of his communications, reflected by documents 2-12, was to provide legal advice to Mrs Oswal in relation to the mortgage retainer. 41 He says the first contact he had in relation to the mortgage retainer was a telephone call from Mr Allen shortly before he received the email from him which is document 2. He knew Mr Allen from his earlier dealings in relation to the property retainers. 42 At all times, he says, he assumed, due to the fact that they knew that they were for Mrs Oswal dealing with him and Allion Legal in their capacity as lawyers, that each of Mr Allen and Mr Martin would keep confidential all communications and correspondence for her which took place between them. Mr Harford states that in light of his duty as a lawyer to keep his client's affairs confidential he would not have communicated or corresponded with them otherwise. 43 As to a third party, Mr Sodum, to whom some documents were sent or copied, Mr Harford says that on 15 December 2010, he had a meeting with Mr Allen and Mr Sodum at the offices of Allion Legal in West Perth in relation to the mortgage retainer. At this meeting, he obtained further instructions from Mr Allen and Mr Sodum in relation to the preparation of the mortgage documentation and the two men also reviewed the draft mortgage and discharge of mortgage that Ms Sowden, his secretary, had sent on his behalf to Mrs Oswal on 13 December 2010. 44 Mr Harford states this meeting was the first time that he had met Mr Sodum and he does not recall what position Mr Sodum held at the time, but he was aware from the meeting and subsequent dealings that he worked for a company with which Mrs Oswal had a connection. He also recalls that at the meeting Mr Sodum gave him his email address and telephone number so that he could correspond with him on behalf of Mrs Oswal. 45 Mr Harford states that as requested by Mr Sodum on 16 December 2010, he sent an email to him which he enclosed a further revised draft mortgage and discharge of mortgage based upon his discussions at the meeting on 15 December 2010. 46 As with both Mr Allen and Mr Martin, he assumed based upon his meeting with Mr Sodum and subsequent communications and the fact that he knew that he was, for Mrs Oswal, dealing with him and Allion Legal in their capacity as lawyers, that Mr Sodum would keep confidential his communications and correspondence with him for Mrs Oswal. In light of his duty as a lawyer to keep his client's affairs confidential he would not have communicated or corresponded with Mr Sodum otherwise. 47 As to Mr Oswal, Mr Harford says that he asked his secretary, Ms Sowden, to send the emails which are documents 7 and 8 to him on his behalf. He also asked Ms Sowden to copy Mr Oswal in on his correspondence because he understood from acting for Mrs Oswal that he was her husband and the communications concerned current and future residential premises for Mr and Mrs Oswal and their family. He therefore assumed he had the same interest in the matter as she did and sent him copies for that reason. 48 As to document 13, Mr Harford states that this is in relation to a notice of dispute lodged by Limited Edition Luxury Homes Pty Ltd regarding the construction of Mrs Oswal's property at 2 Bay View Terrace. Shortly after receiving it, he telephoned Mr Allen and indicated he could not help him as he did not practice in construction law, and Mr Allen said words to the effect of "Okay". 49 For BFPL, counsel says the issue in dispute is whether the various documents were not of a confidential nature or whether there has been an act of waiver with the result that Mrs Oswal is not entitled to enjoy the privilege claimed. It is submitted the fact they were commonly addressed to a range of recipients suggests, in the absence of cogent evidence to the contrary, that they were not confidential communications between lawyer and client for the purpose of securing legal advice. 50 BFPL says the decision in Pratt Holdings may be distinguished as the communications in this case are no longer confidential. In addition, the communications were not passed for a limited purpose, unlike in Mann v Carnell. 51 As to the affidavit of Mr Harford, and his statement that he acted on an understanding that the third parties he was dealing with were acting as confidential agents of Mrs Oswal, it is submitted there is no direct evidence that either Mrs Oswal or the alleged agents confirming the nature of the relationship, including whether the agents were in fact acting on her behalf and, if so, whether on a confidential basis. Rather, the Court is asked to infer each element in circumstances where Mrs Oswal and/or the alleged agents could easily have put on direct evidence confirming the nature of the alleged engagement and any terms of confidentiality but have not done so. 52 The evidence is, it is submitted, that DMG were architects engaged in relation to the construction of a home owned by Mrs Oswal. There is, however, nothing more as to the nature of that engagement and nothing inherent in the relationship between property owner and architect which suggests an agency subject to confidentiality commitments. Indeed, a common role of an architect is to certify or administer the contract with the builder. 53 The applicant says there is even less evidence of the relationship between Mrs Oswal and Mr Sodum. BFPL submits that Mrs Oswal's justification for claiming privilege in relation to each contested document may be answered concisely as follows. The evidence does not support that Mr Sodum was the agent of Mrs Oswal. His duties were owed to his employer not Mrs Oswal personally and there is no direct evidence of any authority having been given to him. Mr Harford has merely assumed this occurrence in his affidavit which is evidence only of his state of mind. 54 As to document 13, the applicant submits the evidence before the Court does not support Mr Khanna, a third party, was the agent of Mrs Oswal. His duties were owed to his employer, not personally to Mrs Oswal and there is no direct evidence of any authority having been given to Mr Khanna. Again, Mr Harford has merely assumed this occurrence which is evidence only of his state of mind. 55 BFPL says that, in these circumstances, it is entirely appropriate for the Court to assess the purpose why each of the documents has been brought into existence. The Court should not be required to draw an inference as to the confidential nature of the alleged agency arrangements, particularly where direct evidence could easily have been put on. In the absence of such evidence and unless the content of various communications, when reviewed by the Court, discloses a basis for confidentiality obligations to be grounded, the Court should find the requisite degree of confidentiality has not been maintained. 56 BFPL further submits that, in relation to documents 2 and 7-11 which were expressed to relate to a "mortgage" and also in relation to documents 7 and 8 which refer to a "mortgage to secure advance from offshore finance provider" that were sent in the period 12 to 19 December 2010, the Court should take the view that these communications were designed to frustrate the processes of law and so will not be protected by legal professional privilege: AWB at [210] and [214]; In the Matter of ACN 005 408 462 Pty Ltd (formerly TEAC Australia Pty Ltd) [2008] FCA 964 at [15]-[16]. 57 The applicant submits that on 24 December 2010 (shortly after the communications referred to concerning Mr Khanna) a mortgage was lodged in favour of Mercury Services Limited (Mercury) over properties at 2 Bay View Terrace, Peppermint Grove and 72 Philip Road, Dalkeith. The mortgage document shows that the address of the mortgagee, Mercury, is listed as PO Box 17398, United Arab Emirates or Apartment 4, Building 99, Jebel Ali, Dubai, United Arab Emirates. This address is, excluding the apartment number reference, the same address as the current address listed for Mrs Oswal and her husband, Mr Oswal, in recent Court documents filed by them and produced to the Court as attachments to the affidavits of Susan May Nicholas filed 21 March 2012 and Simon Guy Theobald filed 1 November 2011. 58 The applicant submits the mortgage document does not specify the amount of consideration (if any) given by Mercury, as mortgagee, nor the secured money which Mrs Oswal is liable to pay to Mercury. The solicitors for the applicant have corresponded with the solicitors for Mrs Oswal requesting an explanation, including whether Mrs Oswal, or any related entity, had any legal or beneficial interest in Mercury but no explanation has been forthcoming. 59 On behalf of Mrs Oswal in response to the latter submissions, it is said that the demand for an explanation was made in the context of a threat to commence proceedings to have the Mercury mortgage set aside in the absence of such an explanation and that no such proceedings have been commenced. 60 It is also submitted that there is no evidence: (a) of the number of apartments in the building in question; (b) of the reason why the consideration is not shown in the Mercury mortgage; (c) that there was an obligation on the solicitors for Mrs Oswal to provide the explanation requested of them; (d) of any connection between Mrs Oswal and Mercury; or (e) of any involvement by Mrs Oswal in any intent to deceive creditors by the making of the Mercury mortgage. 61 In this particular proceeding, it is noted on behalf of Mrs Oswal, that she has expressly denied she was a director of Mercury and no allegation of fraud in respect of the Mercury mortgage or otherwise has been pleaded against her in these proceedings. 62 It is also submitted that the moving party must demonstrate by admissible evidence that objectively speaking communications were made in furtherance of an improper action before the claim to legal professional privilege will be ineffectual, and that it is not enough that documents may be or are relevant to some fraud or a crime: Franks v Warringah Council [2010] NSWSC 1318; Commissioner of Australian Federal Police v Propend Finance Pty Limited (1997) 188 CLR 501 (Propend) at 556; The Attorney-General for the Northern Territory of Australia v Kearney (1985) 158 CLR 500 at 514. 63 Attention is also drawn to Exequatur Pty Ltd v Advanced Components and Peripherals Pty Ltd [1999] VSC 547 at [24] where Warren J (as her Honour then was) stated: In the present matter the plaintiffs, in particular in the affidavit of their solicitor, Mr Petch, only go so far as to express suspicion, assertion and assumption. In Commissioner of Federal Police v Propend Finance Pty Ltd, supra, the views of Gaudron J were echoed by McHugh J at 556. In particular, McHugh J stated quite clearly that where an allegation of illegal purpose or fraud is made for the purposes of displacing a claim of legal professional privilege the party making the assertion bears the onus of proving the assertion. On the face of the affidavit material filed on behalf of the plaintiffs I cannot be so satisfied. More so, in Propend Finance, Gummow J at 576 referred to the classic statement by Sir Owen Dixon in Briginshaw v Briginshaw (1938) 60 CLR 336, 361-362 that 'reasonable satisfaction' as to allegations of moral turpitude is required. The 'matrix of facts' put forward on behalf of the plaintiffs involve serious and sinister allegations. I cannot be satisfied on the face of the affidavits filed on behalf the plaintiffs that their concerns constitute any more than suspicion and assertion... Furthermore, in the course of considering the application by the plaintiffs for the setting aside of privilege in this matter, I observe that no allegation of fraud has been pleaded against the defendants by the plaintiffs in the further amended statement of claim. 64 I am satisfied that the claim made on behalf of Mrs Oswal to legal professional privilege in documents 2-13 is made out. 65 The fact that the documents – in every case emails – were copied to other persons does not, in my view, in the circumstances of this case, of itself indicate that the matters the subject of the emails were not confidential or that confidentiality has been waived. 66 Nor do I accept that, having regard to the evidence as a whole, the fact that the alleged agents, Mr Allen, Mr Martin, Mr Sodum, Mr Oswal and Mr Khanna have not put on affidavits is material. In my view, this is not a case where the so-called rule in Jones v Dunkel (1959) 101 CLR 298 applies. This is not a case where an answer is "required" in all the circumstances of the case: Schellenberg v Tunnel Holdings Pty Limited [2000] HCA 18; (2000) 200 CLR 121 at [51]. 67 I am satisfied from the affidavit of Mr Harford that he understood at all times he was acting on behalf of Mrs Oswal and in fact was. 68 From both Mr Hardy's and Mr Harford's affidavits it is reasonable to infer that Mr Allen, Mr Martin and/or DMG acted as agents for Mrs Oswal in relation to both the construction law issues at 2 Bay View Terrace, Peppermint Grove and in relation to the mortgage retainer issues respectively. 69 In my view, it is also reasonable to infer from the affidavit of Mr Harford that Mr Sodum worked for a company connected with Mrs Oswal and was authorised to act as her confidential agent at all material times in relation to the mortgage retainer he accepted. 70 It is also reasonable to infer from Mr Harford's affidavit that Mr Oswal was authorised to receive communications on behalf of his wife, Mrs Oswal, which would be held confidentially by him. Certainly there is no reason to conclude that the act of copying some emails to Mr Oswal waived the privilege in those communications. 71 As to the copying of document 13, an email by Mr Allen to Mr Harford, copied to a Mr Khanna as well as to Mr Sodum and Mrs Oswal, the company search annexed to the affidavit of Peter Thomas Brabant, filed 15 March 2012, is that Mrs Oswal was a director at material times of Oswal Projects Perth Pty Ltd – a company which now bears the name of the third respondent. It is reasonable to infer Mr Khanna was associated with that company and document 13 was copied to him in that capacity. It is reasonable to infer, in all the circumstances, that he was under an obligation, understood by the terms of his engagement, to keep the communication confidential and there was no loss of confidentiality simply because it was copied to him. 72 Broadly speaking, documents 2-12 appear to be in relation to the mortgage retainer, the dominant purpose of which communications was for the purpose of providing legal advice from Mr Harford. 73 In oral submissions of counsel for BFPL, the main attack maintained was in relation to documents 2-12 is that any documents to do with the mortgage retainer should be viewed by the Court as documents in respect of which any privilege established is subject to the higher public policy consideration mentioned. The difficulty with this submission is that while it is generally stated on behalf of BFPL that the purpose of the mortgage instructions was to, in effect, defraud creditors, there is little, if anything, to support it. Questions as to what the mortgage dealing was all about may be raised, but nothing more. As stated in Propend, more than speculation is required about improper purpose before the Court will find that documents should be disclosed notwithstanding the fact that legal professional privilege would appear to attach to them. There is nothing to suggest that the documents in question are part of some fraudulent process. 74 Where, as here, solicitors are instructed to discharge a mortgage and prepare a new mortgage and provide advice to their client in relation to such matters, then do so, without more there is nothing to establish an allegation that the provision of the advice or the preparation of documents effects some fraudulent transaction, or indeed evidences some fraudulent intent or process on behalf of the client. 75 In accordance with the desire of the parties in this case I have also had regard to the confidential documents 1-13 that were provided to me in a sealed envelope in forming these judgments. In the result, I am satisfied that at all material times the documents 1-13 were documents provided for the purpose of the lawyers referred to providing legal advice to their client, Mrs Oswal. Nothing in the copying of some of the communications to or by persons who were not the client has resulted in the communication not being for the purposes of legal advice or any loss of confidentiality or waiver of privilege. At all times the person who caused documents to be provided to the lawyers were, by inference, the appointed, confidential agents of Mrs Oswal. Other persons to whom such communications were copied were also, by reasonable inference, agents or persons authorised by Mrs Oswal to receive those communications and to keep them confidential in her interests. No fraudulent transaction or intent is disclosed by the documents. conclusion and orders 76 In all of these circumstances, Mrs Oswal is entitled to the interlocutory order that she seeks as well as an order that the applicant pay her costs of the interlocutory application. 1. Documents 1-13 in an annexure A to the interlocutory application filed on behalf of the second respondent on 3 February 2012 produced pursuant to the subpoenas for production addressed to the following entities: (i) Design Management Group Pty Ltd; (ii) DMG Construction (WA) Pty Ltd; and (iii) Limited Edition Luxury Homes Pty Ltd are privileged on the basis that they are subject to legal professional privilege pursuant to the common law. 2. The applicant pay the second respondent's costs of the application, to be taxed if not agreed. I certify that the preceding seventy-six (76) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker. Associate: Dated: 30 October 2012