FEDERAL COURT OF AUSTRALIA University of Sydney v ObjectiVision Pty Limited [2018] FCA 393 File number: NSD 385 of 2014 Judge: BURLEY J Date of judgment: 16 March 2018 Catchwords: PRIVILEGE – Legal professional privilege – Waiver of privilege – whether sending letter of advice to third parties constitutes waiver of privilege under common law PRIVILEGE – Legal professional privilege – whether legal professional privilege exists in relation to notes of meeting with external solicitors and third parties under common law Legislation: Evidence Act 1995 (Cth) s 117 Cases cited: AWB v Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30 Esso Australia v FCT [1999] HCA 67; (1999) 201 CLR 49 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 State of New South Wales v Betfair Pty Ltd [2009] FCAFC 160; (2009) 180 FCR 543 Date of hearing: 15 March 2018 Registry: New South Wales Division: General Division National Practice Area: Intellectual Property Sub-area: Patents and associated statutes Category: Catchwords Number of paragraphs: 38 Counsel for the Applicant/First Cross-Respondent: Mr M J Darke SC with Mr P W Flynn and Mr D B Larish Solicitor for the Applicant/First Cross-Respondent: King & Wood Mallesons Counsel for the Respondent/Cross-Claimant: Mr R Cobden SC with Ms L Thomas Solicitor for the Respondent/Cross-Claimant: Allens Linklaters ORDERS NSD 385 of 2014 BETWEEN: THE UNIVERSITY OF SYDNEY ABN 15 211 513 464 Applicant AND: OBJECTIVISION PTY LIMITED ACN 090 253 697 Respondent AND BETWEEN: OBJECTIVISION PTY LTD ACN 090 253 697 Cross-Claimant AND: THE UNIVERSITY OF SYDNEY ABN 15 211 513 464 First Cross-Respondent VISIONSEARCH PTY LTD ACN 150 067 271 Second Cross-Respondent JUDGE: BURLEY J DATE OF ORDER: 16 March 2018 THE COURT ORDERS THAT: 1. The applicant's claim for legal professional privilege in Confidential Exhibit A1 is upheld. 2. The respondent pay the applicant's costs of the Interlocutory Application dated 9 March 2018. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT Revised from Transcript BURLEY J: Introduction 1 On 2 March 2018 the respondent in these proceedings (ObjectiVision) served the applicant (University) with a Notice to Produce seeking the production of the following disputed documents: (a) A copy of Mallesons' letter of 22 November 2010 (KWM letter); (b) Any notes of the meeting at Mallesons on 30 November 2010 (including Mallesons' file notes) (KWM file notes). 2 King & Wood Mallesons (KWM) are the solicitors acting for the University. 3 On 9 March 2018 the University filed an interlocutory application seeking orders that the Notice to Produce be set aside, in whole or in part, and costs. The application was supported by an affidavit sworn by Scott Bouvier, the partner at KWM with carriage of the proceedings. 4 The interlocutory application was heard on the fourth day of the hearing of the main proceedings (which has been listed for six weeks) when the University produced the disputed documents to the Court. 5 The proceedings concern (in broad terms) a dispute between ObjectiVision and the University about whether certain intellectual property licence agreements have been validly terminated, and copyright and breach of confidence claims. For present purposes it is not necessary to address the details of the claims and cross claim in further detail. The technology that is the subject of the licence agreements (again, broadly) concerns medical devices in the field of ophthalmology and in particular multifocal visual stimulation techniques, specifically multifocal visual evoked potentials referred to as mfVEP. 6 Two bases are advanced by the University for setting aside the Notice to Produce. First, that the disputed documents sought are irrelevant to the pleaded case. Secondly, that the disputed documents benefit from legal professional privilege on the basis that they were brought into existence for the dominant purpose of giving or obtaining legal advice as to the termination of the relevant licence agreements, and anticipated ensuing litigation by, ObjectiVision against the University; Esso Australia v FCT [1999] HCA 67; (1999) 201 CLR 49 at 68-69; AWB v Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30 at [44]. 7 ObjectiVision responds by submitting that the documents are relevant to the issues and that such privilege as exists in the disputed documents has been waived by the provision of them to two people who are not employees of the University, Mr Ken Coles and Dr Chris Peterson, because the disclosure was inconsistent with the maintenance of privilege. In particular, ObjectiVision contends that there is insufficient evidence to warrant a finding that the documents or advice was communicated to them in confidence. 8 I was informed by ObjectiVision that it was necessary for me to determine the outcome of the dispute before the first witness was called to give evidence. Accordingly, on the day of the argument I indicated to the parties that I would uphold the University's claim for privilege. I also indicated that I would give my reasons for doing so shortly afterwards. These are my reasons. As I have upheld the claim for privilege, it is not necessary for me to determine the relevance argument. The disputed documents 9 In his affidavit Mr Bouvier deposes to being retained in 2008 to act on behalf of the University to advise on its dispute with ObjectiVision. He notes that ObjectiVision threatened legal action against the University several times in the course of correspondence during 2009 for rendering certain intellectual property licence agreements non-exclusive. In January 2010 representatives of the University and ObjectiVision, including Mr Coles, attended a mediation in relation to the dispute and the parties executed a document entitled "Heads of Agreement". Thereafter, in accordance with the requirements of the Heads of Agreement, the parties entered into two further agreements; one in March 2010 being a Technical Assessment Agreement and another in August 2010 being a Training Sessions Agreement. 10 On 27 August 2010 ObjectiVision's then solicitors Gilbert + Tobin (G+T) wrote to the University alleging that the University had acted in breach of various contractual obligations owed to it, including under the Technical Assessment Agreement and the Training Sessions Agreement. There followed correspondence between KWM and G+T. By November 2010 Mr Bouvier considered that there was a real prospect that ObjectiVision would commence legal proceedings at some point in time against the University in relation to the various agreements that they had entered into. 11 The Notice to Produce requires production of the KWM letter. Mr Bouvier states in his affidavit that he has not been able to identify any such letter. However, he did identify three emails dated 22 November 2010, namely: (1) an email from Mr Bouvier to Sara Hofman and Ewa Miszczak, copied to a solicitor under his supervision (Ms Croft), with the subject "ObjectiVision status" (22 November email); (2) a subsequent email from Ms Miszczak to Dr Greg Ward and Ms Anna Grocholsky, copying Ms Hofman (Miszczak email); and (3) a further email from Dr Ward to Associate Professor Alexander (Sasha) Klistorner, Ken Coles, Professor Peter McCluskey, Dr Chris Peterson and Professor John Grigg, copying Ms Miszczak (Ward email). 12 Mr Bouvier explains that the 22 November email was prepared by Ms Croft under his supervision. He explains that Ms Hofman and Ms Miszczak were employed by the University in its Office of General Council as solicitors, with current practicing certificates. He states that the 22 November email comprises a confidential communication from KWM to the University containing legal advice concerning the Heads of Agreement, the Technical Services Agreement and the Training Consultancy Agreement, which are the agreements in dispute. 13 I am satisfied that the 22 November email is a privileged communication that benefits from legal professional privilege in that it is a confidential communication created for the dominant purpose of providing legal advice to the University in relation to its response to ObjectiVision's claims and threats of litigation. The chronology of events leading to the 22 November email, the role of Mr Bouvier and the evidence of Mr Bouvier to this effect each support that proposition. Furthermore, having reached this view, and at the University's suggestion (which was not opposed by ObjectiVision), I have read the disputed documents. The contents of the 22 November email reinforces my view that it is entitled to legal professional privilege. 14 The Miszczak email was sent by Ms Miszczak, copied to Ms Hofman, to Dr Ward (who was the Business Development Manager at Sydnovate which is the University's technology transfer office responsible for the commercialisation of intellectual property) and Ms Grocholsky (who was the manager of intellectual property at the University). In a portion of the email in respect of which no claim for privilege is advanced Ms Miszczak says: Please see email below from Mallesons. Greg - Would you be able to liaise with relevant SSI representatives regarding their availability to meet with us & Mallesons to discuss our strategy going forward? You may want to forward the summary below to them for reference. 15 Mr Bouvier states that the "summary" referred to (which has been redacted from the version in evidence) is the 22 November email. 16 For the same reasons as stated, I am satisfied that the redacted portion of the Miszczak email is also a privileged communication. 17 Mr Bouvier gives evidence that the Ward email was sent by Dr Ward, copied to Ms Miszczak, to individuals who were at the time all directors of or advisory board members of the Save Sight Institute (SSI) and members of the SSI mfVEP sub-committee. The Ward email also forwards the 22 November email to those persons. Accordingly, subject to the question of whether privilege is waived by reason of the status of Mr Coles and Dr Peterson, for the same reasons as those given in relation to the 22 November email, I find that the Ward email is a privileged communication. 18 Mr Bouvier states that the KWM file notes comprise notes taken by Ms Miszczak and by Ms Croft during the course of a meeting at KWM on 30 November 2010. He says that he understands the purpose of the meeting was for him to provide legal advice to the University in relation to ObjectiVision. In attendance were representatives of SSI, Sydnovate and KWM. Mr Coles and Dr Peterson were listed as representatives of SSI. The persons present at the meeting at which the notes were taken were: (1) Mr Bouvier and Ms Croft of KWM; (2) Dr Anders Hallgren (director of Sydnovate) and Dr Ward of Sydnovate; (3) Ms Hofman and Ms Miszcak of the University; and (4) Dr Peterson, Associate Professor Klistorner and Mr Coles of SSI. 19 The meeting was held 8 days after Mr Bouvier caused the 22 November email to be sent. As the Miszczak email states, it was for the purpose of discussing the content of that email. I have examined the KWM file notes. In my view they both record legal advice given for the requisite dominant purpose, in circumstances of confidence, which qualify for legal professional privilege. I do not accept ObjectiVision's submission that on the evidence relied upon in the application there was a separate or other substantial purpose for the meeting which prevailed. I turn below to ObjectiVision's submission that by reason of Dr Peterson and Mr Coles' presence at the meeting, no privilege could attach to the KWM notes. Consideration 20 I first turn to consider the issues relevant to the 22 November email, the Miszczak email and the Ward email. 21 I have found that each is entitled to legal professional privilege subject only to the resolution of the issues raised by ObjectiVision. It contends that privilege in the 22 November email has been waived by Dr Ward forwarding the 22 November email to Mr Coles and Dr Peterson. It contends that neither Mr Coles nor Dr Peterson were sufficiently bound by obligations of confidence to warrant the maintenance of privilege and because there was no basis to conclude that it was for the dominant purpose of anticipated litigation or the provision of legal advice. 22 A person who would otherwise be entitled to the protection of legal professional privilege in respect of a communication may at common law lose that protection by virtue of some act of waiver. The test for waiver formulated by the High Court in Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1 at [29] is: Waiver may be express or implied. Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect… What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large. 23 The question of waiver in the present case does not depend on the legal status of Mr Coles or Dr Peterson, but on the question of whether or not the provision by Dr Ward of the KWM advice set out in the 22 November email is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. In my view it is not. 24 First, I begin by addressing the roles of Dr Peterson and Mr Coles. There is no dispute that each had been involved in the conduct of the affairs of SSI since well before November 2010. Mr Coles was involved in it from at least 1999. He was President of the SSI in its various iterations until 2010. A 2009 Annual Report of SSI that was tendered in the interlocutory application states that SSI went from being an institute of the University to a complying institute within it. It has a management committee and an advisory board. Mr Coles and Dr Peterson were both members of the advisory board. The Report records that in 2009 Dr Peterson was appointed to the board with the particular brief to help Associate Professor Klistorner in the research and commercialisation of his work. Associate Professor Klistorner was an inventor of the mfVEP technology, the subject of the licences in dispute. The report also identifies the cooperation between SSI and Sydnovate in relation to the commercialisation of the mfVEP technology. 25 The cooperation between the SSI and Sydnovate necessarily involved liaison between those bodies in relation to ObjectiVision. In an email dated 26 October 2010, that was also tendered, Mr Coles informs SSI and Sydnovate personnel of a sub-committee within SSI that had been set up to assist Sydnovate in its dispute with ObjectiVision. He and Dr Peterson were part of that sub-committee. 26 As noted, in January 2010 Mr Coles participated in a mediation on behalf of the University that was conducted to resolve various licensing disputes with ObjectiVision. It was at that mediation that the parties agreed to enter into the Heads of Agreement, as well as the Technical Assessment Agreement and the Training Sessions Agreement to which the disputed documents relate. 27 Secondly, Mr Bouvier exhibits to his affidavit a copy of the University Code of Conduct which is applicable to staff and "affiliates", which include members of University committees, office holders and any person appointed or engaged by the University to perform duties or functions on its behalf. This code was in place from April 2008 until February 2012. Mr Coles and Dr Peterson were affiliates within the definition. As a consequence they were obliged by the relevant code of conduct to maintain the confidentiality of University records and information to which they had access in the course of their engagement and to take all reasonable steps to prevent unauthorised access to or misuse of University records and information. The code of conduct requires that they must not use information other than for an authorised purpose. 28 The provision by the University of the Ward email under circumstances where its own code of conduct provides for the maintenance of such communications as confidential indicates that the disclosure to Dr Peterson and Mr Coles was not inconsistent with the maintenance of privilege in a confidential communication. To the contrary, having regard to their lengthy relationship with the University and positions that they held, the University may be understood reasonably to have provided the 22 November email to them in the expectation that its contents would be maintained as confidential and used for the purpose of assisting the University in addressing the dispute with ObjectiVision. 29 Further, the information contained in the Ward email and the circumstances in which it was sent give rise to a ready implication of an obligation of confidence on the part of each of the recipients of the email. In the case of Dr Peterson and Mr Coles, they were receiving a communication from the external legal advisors of the University concerning the approach that the University should take towards ObjectiVision in a role that they had both been exercising on behalf of the University since well before 2010. 30 Thirdly, the nature of the role played by Mr Coles and Dr Peterson within the SSI and SSI's liaison with Sydnovate indicates that the provision to them of the Ward email was entirely consistent with the maintenance of privilege in the document. Each was assisting the University and its bodies in determining how to address issues raised by reason of their relationship with ObjectiVision. 31 I now turn to the question of legal professional privilege in the KWM file meeting notes. 32 ObjectiVision contends that legal professional privilege attaches to a communication between a lawyer and their client or an agent of the client, but not to a communication with any other person. The definition of "client" in s 117(1) Evidence Act 1995 (Cth) includes a person or body who engages a lawyer to provide legal services or an employee or agent of a client. ObjectiVision submits that the position at common law is no different. As Dr Peterson and Mr Coles were not employees or agents of the University, legal advice privilege does not attach to communications between KWM and them. 33 I am unable to accept these submissions. 34 In State of New South Wales v Betfair Pty Ltd [2009] FCAFC 160; (2009) 180 FCR 543 (Betfair) the Full Court considered whether legal professional privilege applied to communications between third party members of a working group and members from racing bodies in New South Wales to assist the State in developing legislative drafting instructions for Parliamentary Counsel. The Full Court considered that members of the working group were working together consensually under a regime of confidentiality to formulate and finalise the drafting of instructions that the State was to provide to Parliamentary Counsel. It concluded that the communications between the members were made for the dominant purpose of seeking and obtaining legal advice. The privilege attached not only to communications from the working group, but also from the State (the client) to the working group itself, even though it was not that information that went to Parliamentary Counsel. To find otherwise, the Full Court found, would be artificial. It said at [40]: Provided a communication is made with the dominant purpose of the client seeking or obtaining legal advice, we see no reason why privilege should not protect communications between the client and third parties whose knowledge is desirable or necessary for the client to obtain the legal advice the client desires, as in this case. 35 The findings in Betfair indicate that at common law the question is not whether or not the recipient of the legal advice is a client, or employee or agent of the client, but rather a more nuanced one. As the Full Court observed earlier in its reasons (at [31]), citing Stone J (with whom Merkel J agreed at [52]) in Pratt Holdings Pty Ltd v Commissioner of Taxation [2004] FCAFC 122; (2004) 136 FCR 357: Stone J explained that, in recognizing that the privilege covered a confidential communication brought into existence by third parties provided the dominant purpose requirement was met, the Court was protecting the policy at the heart of the privilege. Her Honour said at 381 [86]: If, however, the policy implicit in the rationale for legal professional privilege is not to be subverted, the dominant purpose criterion must be applied recognising that the situations in which people need legal advice are increasingly complex and that the client may need the assistance of third party experts if he or she is to be able to instruct the legal adviser appropriately. 36 In the present case, Mr Coles and Dr Peterson formed part of an advisory board that was instrumental in assisting SSI and Sydnovate in relation to the University's dispute with ObjectiVision. I am comfortably able to infer that it was desirable or necessary for the University to have the benefit of the knowledge of each of these individuals in considering the 22 November email. In this regard, I note, in addition to the matters concerning their respective roles identified above, that ObjectiVision's pleaded case in relation to the breach of the Technical Assessment Agreement and the Training Sessions Agreement is that both individuals attended the technical and training assessments on behalf of the University that were said to have failed to satisfy the University's obligations under those agreements. Further, as I have noted, Mr Coles attended the mediation. Both Mr Coles and Dr Peterson were in a position to contribute knowledge to the decision making process of the University. Accordingly, I find that the presence of Mr Coles and Dr Peterson at the meeting on 30 November 2010 did not serve to waive legal professional privilege in the KWM file notes. Disposition 37 I have found that the claim for legal professional privilege is made out and that ObjectiVision has not established that there has been a waiver. 38 The University tendered the disputed documents that answered the Notice to Produce, and so it is perhaps redundant to make orders setting the Notice to Produce aside. In my view, the appropriate orders are: (1) The applicant's claim for legal professional privilege in Confidential Exhibit A1 is upheld. (2) The respondent pay the applicant's costs of the interlocutory application dated 9 March 2018. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Burley. Associate: Dated: 20 March 2018