Carrafa v Asfar (No. 3) [2023] NSWSC 24

Supreme Court New South Wales

Medium Neutral Citation: Carrafa v Asfar (No. 3) [2023] NSWSC 24 Hearing dates: In Chambers Date of orders: 1 February 2023 Decision date: 01 February 2023 Jurisdiction: Equity Before: Slattery J Decision: Client privilege claimed by the second and third defendants lost. Orders made for disclosure of the documents together with consequential directions. Catchwords: PRIVILEGE – CLIENT PRIVILEGE – Evidence Act 1995, s 125 – plaintiffs are trustees of the estate of a bankrupt – the plaintiffs contend that in 2016 the executor of an estate, the first defendant, held certain real property on trust for the bankrupt – the second and third defendants are creditors of the estate of the bankrupt – the fourth defendants are the solicitors for the second and third defendants – the second and third defendants secure the appointment of the plaintiffs as trustees of the estate of the bankrupt in place of the Official Trustee – the second and third defendants seek freezing orders against the real property said to be held by the first defendant on trust for the bankrupt – the plaintiffs claim that the second and third defendants pursued the freezing orders acting as fiduciaries on behalf of the plaintiffs for the benefit of the general creditors of the bankrupt's estate – the second and third defendants reach a settlement agreement with the first defendant in which real property held by the first defendant is sold, and the proceeds of sale are distributed partly to the second and third defendants and partly to the first defendant – the plaintiffs allege the settlement agreement was made dishonestly in breach of the second and third defendants' claimed fiduciary duty to the plaintiffs and concealed from the plaintiffs and had the effect of fraudulently disadvantaging the other creditors of the bankrupt estate – the plaintiffs contend that client privilege has been lost in the documents because the documents were created in furtherance of the commission of a fraud or were communications which ought reasonably to have been known to have been prepared in furtherance of an abuse of power, within Evidence Act, s 125 – whether client privilege has been lost in the documents by reason of Evidence Act, s 125. Legislation Cited: Evidence Act 1995, ss 91(1), 125, 126,131A, 133 Legal Profession Uniform Conduct (Barristers) Rules 2015, rr 24 and 25 Real Property Act 1900 Cases Cited: Amcor Ltd v Barnes [2011] VSC 341 AMV Australia Pty Ltd v Premier Compensation Lawyers Pty Ltd [2020] NSWSC 446 Carrafa v Asfar [2020] NSWSC 530 Carrafa v Asfar [2022] NSWSC 1177 Clements, Dunne & Bell Pty Ltd v Commissioner of Australian Federal Police (2001) 188 ALR 515 Cleveland Investments Global Pty Ltd v Ficaro Pty Ltd [2016] NSWSC 473 Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 Director of Public Prosecutions (Cth) v Kinghorn (2020) 102 NSWLR 72 Director of Public Prosecutions (NSW) v Stanizzo (2019) 367 ALR 256 Hasler v Singtel Optus Pty Ltd (2014) 87 NSWLR 609 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 222 Kang v Kwan [2001] NSWSC 698 Kaye v Woods (No 2) (2016) 309 FLR 200 KTC v David [2022] FCAFC 60 Marcolongo v Chen (2011) 242 CLR 546 Marsden v Amalgamated Television Services Pty Ltd [1999] NSWSC 259 Talacko v Talacko [2014] VSC 328 Trendlen Pty Ltd v Mobil Oil Australia Pty Ltd [2005] NSWSC 741 Van Der Lee v New South Wales [2002] NSWCA 286 Category: Procedural rulings Parties: Plaintiff: Michael Carrafa and Fabian Micheletto in their capacities as joint and several trustees in bankruptcy of the estate of Peter Ronald Evans