Apple v Wily [2002] NSWSC 855

New South Wales Supreme Court

CITATION : Apple v Wily [2002] NSWSC 855 revised - 20/09/2002 CURRENT JURISDICTION: Equity Division Corporations List FILE NUMBER(S) : SC 2698/02 HEARING DATE(S) : 02/09/02 JUDGMENT DATE : 19 September 2002

Apple Computer Australia Pty Limited - Plaintiff PARTIES : Andrew Hugh Jenner Wily - First Defendant Buzzle Operations Pty Ltd (Receivers Appointed) (In Liquidation) - Second Defendant JUDGMENT OF : Barrett J

COUNSEL : Mr C R Newlinds - Plaintiff Mr M R Aldridge SC - Defendants SOLICITORS : Clayton Utz - Plaintiff MBP Legal - Defendants CATCHWORDS : PROCEDURE - evidence - access to documents produced - claim for client legal privilege - who is "client" - confidential communications concerning litigation funding LEGISLATION CITED : Evidence Act 1995 Supreme Court Rules Carter v Managing Partner, Northmore Hale Davy & Leake (1995) 183 CLR 121 Day v Mead [1987] 2 NZLR 443 CASES CITED : Re Global Medical Imaging Ltd [2001] NSWSC 476 Grant v Downs (1976) 135 CLR 674 Maxwell v Chittick (unreported, NSWCA, 23 August 1994) Telstra Corporation v Australia Media Holdings (No 10) (1997) 41 NSWLR 147 DECISION : See paragraph 21

- 11 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST

BARRETT J

THURSDAY, 19 SEPTEMBER 2002

2698/02 – APPLE COMPUTER AUSTRALIA PTY LIMITED v ANDREW HUGH JENNER WILY AND ANOR

JUDGMENT

1 The plaintiff, Apple Computer Australia Pty Ltd ("Apple"), seeks access to documents produced by the first defendant, Mr Wily (liquidator of the second defendant, Buzzle Operations Pty Ltd), in response to a notice to produce and documents produced on subpoena by two firms of solicitors, Isaac Brott & Co ("Brott") of Melbourne and Surry Partners ("Surry") of Sydney. The application for access is, in each case, opposed as to certain documents said to be subject to client legal privilege. The privilege asserted is, in each case, that of Mr Wily. 2 In proceedings part heard in the Commercial List, Apple sues thirteen defendants upon causes of action said to arise from their having guaranteed certain obligations owed by Buzzle to Apple. Brott acts for some of those defendants (referred to, for convenience, as "the Hartono parties"). Brott instructed Surry as its Sydney agents. It is said that Surry on some occasions also acted direct for the Hartono parties. The basis on which client legal privilege is said by Mr Wily to subsist in his favour in relation to the content of certain of the documents produced by himself, Brott and Surry is elucidated in an affidavit of the defendants' solicitor, Mr Griesz of MBP Legal, sworn on 6 August 2002: "4. I am informed by Wily and verily believe that Issac Brott & Co and Surrey Partners Lawyers act for creditors of Buzzle who petitioned to have Wily appointed as the Liquidator of Buzzle and also act for parties providing litigation funding for Wily in his capacity as Liquidator of Buzzle to conduct public examinations to determine if Buzzle has any claims against other persons or entitles which it can pursue to recover monies to repay creditors. 5. Communications and documents have passed between Wily and Issac Brott & Co and between Wily and Surry Partners Lawyers which relate to the litigation funding and to legal strategy, which Wily adopts and/or relates to the confidential communications and the provision of legal services by MBP Legal to Wily and Buzzle. 6. The communications and documents referred to in the preceding paragraph between Wily and third persons, namely Issac Brott & Co or Surry Partners Lawyers, were with reference to anticipated litigation referred to in paragraph 4 above and/or were made for the purpose of being put before MBP Legal with the object of enabling MBP Legal to prosecute such anticipated litigation for the dominant purpose of such anticipated litigation. 7. I am instructed by Wily that he, on behalf of Buzzle and himself, asserts privilege over the communications and documents referred to in paragraphs 5 and 6 above, which are contained in the envelope marked privileged." 3 It will thus be seen that the confidentiality said to be the basis of the privilege in this case is confidentiality as between Mr Wily and Brott and as between Mr Wily and Surry, even though it is also said that the persons for whom Brott and Surry act are the creditors of Buzzle upon whose application Wily was appointed liquidator and parties providing litigation funding to Wily to enable him to conduct examinations of persons against whom Buzzle may be able to pursue claims. It is not said that Brott or Surry acted at any relevant time for Mr Wily. 4 Mr Wily's resistance to Apple's present application is based on Part 36 rule 13(2)(a) of the Supreme Court Rules which applies where a person is required by subpoena or other order by the court or by notice under Part 36 rule rule 16(1) to produce a document to the court. Part 36 rule 13(2)(a) provides: "The Court shall not compel, and rule 16 shall not require, production of a document or an answer to a question, unless and until the Court directs that the production or answer shall not be prevented by this subrule: (a) over the objection of a person if evidence of the document, or of an answer to the question, could not be adduced in the proceedings over the objection of the person, by virtue of the operation of Part 3.10 Division 1 of the Evidence Act; …" 5 The tests to be applied in the present case are thus the tests in Part 3.10 Division 1 of the Evidence Act 1995 in relation to proceedings in "a NSW court" (see s. 4). Those tests emerge from ss.118 and 119 of the Act: " 118. Legal Advice Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of: (a) a confidential communication made between the client and a lawyer, or (b) a confidential communication made between 2 or more lawyers acting for the client, or (c) the contents of a confidential document (whether delivered or not) prepared by the client or a lawyer, for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client."