Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Levy v Bablis [2012] NSWCA 157 Hearing dates: 24 May 2012 Decision date: 30 May 2012 Before: Beazley JA Decision: Uphold the claim for privilege in respect of the documents produced pursuant to subpoena dated 2 September 2011 addressed to MacGillivrays and order that the appellant Mr Levy not have access to those documents. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Catchwords: PRACTICE & PROCEDURE - Interlocutory application - Application for leave to adduce fresh and further evidence on appeal EVIDENCE - Subpoena to produce documents - Claim of legal professional privilege over subpoenaed documents - Whether the documents were privileged - Copies of documents submitted to legal advisers for legal advice are privileged - Waiver of privilege - Originals not privileged Cases Cited: Commissioner Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3; 188 CLR 501 Mann v Carnell [1999] HCA 66; 201 CLR 1 Category: Interlocutory applications Parties: Julian Emmanuel Levy (Appellant) Peter Bablis (Respondent) Representation: Counsel: P Menzies QC; B K Nolan (Appellant) M Raine (sol) (Respondent) M Condon (Sherwood Group) Solicitors: Tsolakis Solicitors (Appellant) Minter Ellison (Respondent) File Number(s): CA 2006/260173 Publication restriction: No Decision under appeal Citation: Julian Emmanuel Levy v Peter Bablis & Anor [2011] NSWSC 461 Date of Decision: 2011-05-19 00:00:00 Before: Slattery J File Number(s): 2006/260173 Judgment 1HER HONOUR: Mr Julian Levy is the appellant in an appeal brought from a decision of Slattery J in which his Honour entered judgment for the first respondent, Mr Peter Bablis: Julian Emmanuel Levy v Peter Bablis & Anor [2011] NSWSC 461. The proceedings related to investments Mr Levy made in 2005 in a total sum of $1 M by way of a 'private placement'. Mr Levy deposited the monies with United Producers & Associates Pty Limited (UPA), the second defendant in the proceedings before Slattery J. Mr Levy claimed that Mr Bablis was also liable to him for the monies so paid on the basis of breach of contract, breach of fiduciary duty and/or negligent misstatement. Slattery J rejected each of the claims brought against Mr Bablis, but gave judgment against UPA in the sum of $2 M. The sum of $2 M represented the amount of the investment plus the promised return of 100 per cent within 12 months of the date of the investment. 2At trial, Mr Bablis contested Mr Levy's claims in their entirety. The trial judge, at [11], identified the principal issues "in contest" between the parties as: "... whether Mr Levy made a 'private placement' at all or whether he entered some different transaction; whether the transaction he did enter was with Mr Bablis and UPA or was just a transaction with UPA; and, even if the transaction was with UPA, whether Mr Bablis accepted some form of legal responsibility for advising Mr Levy to enter the transactions or for the return to Mr Levy of the value of his investment." 3The trial judge's determination in favour of Mr Bablis depended to a significant degree on whose evidence he accepted. In the result, his Honour accepted Mr Bablis' evidence on the essential aspects of the discussions between him and Mr Levy. 4In his notice of appeal, Mr Levy advanced a single ground of appeal, as follows: "The judgment under appeal was occasioned by substantial injustice and is flawed by reason of the unavailability of admissible and credible evidence ... The fresh evidence is of such probative value and significance that, taken with the evidence given at the trial, it will in all probability be decisive of the issues between the parties and result in a different verdict." 5The notice of appeal was accompanied by a notice of motion in which the appellant sought leave to adduce both fresh and further evidence on the appeal. Mr Levy claims that this evidence will demonstrate that the respondent, in his oral evidence, practiced a deception on the Court. 6In preparation for the hearing of the notice of motion to adduce fresh evidence, Mr Levy issued a subpoena to Messrs MacGillivrays, solicitors, who in 2003 were retained by Sherwood Group Pty Ltd (Sherwood). 7The terms of the subpoena were as follows: "The original, and if the originals are not available, copies of: 1. All documents relating to, referring to or recording matters concerning the Sherwood Group Pty Limited and/or Mr Robin Huston and/or Mr Peter Bablis and/or Mr Noel Collett ('the Directors'), which are marked 'Freedom' or contained in the 'Freedom file'. 2. All documents of the Sherwood Group Pty Limited ('Sherwood') or any of its Directors referring to, relating to or recording: (a) the making of a placement by Sherwood in a foreign account in Switzerland or elsewhere in approximately 2001, including but not limited to the placement with or which is associated with Mr Piotr O'Such ('the Placement'); (b) the terms of the Placement, including but not limited to any contracts, shareholder agreements, unit holders agreements, indemnity agreements, and disclaimers entered into by any investors of Sherwood Group relating to the Placement; (c) any attempt made by or on behalf of Robin Huston, Peter Bablis or Sherwood, from September 2001 to the present, to withdraw the proceed of any funds deposited in or about September 2001 from Citibank account No. 900 261 2093 DBUC to Citibank Account no. 900270 5813 DBUC 840. (d) the source of funds in respect of the deposits and investments amounting to $10,095,953.53 as evidenced in its Citibank account no 0-459914-651 ('Citibank Account') as at 30 November 2001; and (e) the application of funds in the Citibank Account from 30 November 2001 to 31 December 2005." 8Sherwood has claimed privilege for the documents. The privilege was claimed through Mr Collett, who is presently the sole director of Sherwood, in his affidavit sworn in the Court of Appeal proceedings on 15 February 2012. 9Mr Collett annexed to his affidavit, by way of a schedule marked "A", the list of documents for which privilege was claimed. As a background to the privilege claim, he deposed that the solicitors, MacGillivrays, had been retained by Sherwood in 2003 to advise it and to act on its behalf to recover funds in Switzerland. MacGillivrays had engaged Swiss lawyers to assist in the provision of that advice. Mr Collett further deposed that MacGillivrays had also communicated with Hardings Lawyers during the course of its retainer. Mr Collett also stated that efforts were made to recover funds in Poland. 10Mr Collett then identified the documents for which privilege was claimed in the following terms: The MacGillivrays documents are predominantly communications between MacGillivrays and the Swiss Lawyers, Hardings lawyers, myself, and Robin Huston ... concerning Sherwood's recovery of funds in Switzerland." 11Mr Collett then stated that the remaining documents fell into two categories. The first category were documents Sherwood had provided to MacGillivrays for the purposes of obtaining legal advice. The second category were draft documents that MacGillivrays had created for Sherwood pursuant to Sherwood's instructions. 12It is useful at this point to specify the documents identified in Schedule A to Mr Collett's affidavit. The categorisation is mine and is for ease of reference only. (1)Documents 1, 2, 4 and 5 were identified as either unsigned agreements or unsigned deeds which were undated. (2)Documents 3 and 6 were identified as unsigned agreement with handwritten marking and which were undated. (3)Document 8 was identified as signed agreement dated 1 May 2001, (4)Documents 7, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26 and 28 were, communications between MacGillivrays and overseas lawyers or MacGillivrays and Sherwood. (5)Document 9 was a facsimile from JW Bell & Associates Pty Ltd to Sherwood, with attachment dated 26 November 2001. (6)Documents 10, 11 and 12 were signed or unsigned letters from Sherwood to Citibank Ltd, all dated 12 February 2002. (7)Documents 13 and 14 were a Citibank Application for International Payment Order and a Multicurrency Account Transaction Form, both dated 13 February 2002. (8)Document 15 was a bundle of Citibank documents comprising 3 pages dated 14 February 2002. (9)Document 27 was an unsigned declaration dated 2 May 2003. (10)Document 29 was a letter from Sherwood to Hardings Lawyers dated 30 May 2003. 13Mr Levy contested the claim for privilege on two bases: first, the documents were not privileged; and secondly, if the documents were privileged, privilege was waived by Sherwood. Whether documents privileged 14In my opinion, Mr Levy's submission that the documents were not privileged cannot succeed in respect of the documents identified in categories 4 and 10. They were communications between legal advisers or between legal advisers and Sherwood in respect of the subject matter of MacGillivrays' retainer. 15As to the balance of the documents (other than draft documents), Sherwood submitted that, in accordance with the principle in Commissioner Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3; 188 CLR 501, the documents were copy documents submitted to legal advisers for legal advice and thus were privileged, notwithstanding that the original of the document was not privileged. 16Propend was concerned with a claim for legal professional privilege relating to documents obtained pursuant to the execution of a search warrant under the Crimes Act 1914 (Cth) s 10. Nonetheless, the Court's reasons, which must be read subject to the now governing "dominant purpose" rule of legal professional privilege, applied to claims for privilege generally. In this regard, Brennan CJ said, at 509: "Authority and principle thus combine to establish that, prima facie, copies of non-privileged documents are privileged if the copies are brought into existence solely for the purpose of obtaining or giving legal advice or solely for use in litigation that is pending, intended or reasonably apprehended." 17Mr Levy argued that the doctrine of legal professional privilege in Propend attached to communications and not to documents, so that the principle did not apply in this case. Whilst as a general statement it is correct to say that the privilege attached to communications, that begs the question as to what constitutes a communication. This was dealt with by Gaudron J and McHugh J in Propend in the following passages. 18Gaudron J pointed out, at 543: "... a document which is brought into existence solely for the purpose of obtaining legal advice or solely for use in litigation and which is then provided to a lawyer for that purpose is, itself, a communication with the lawyer and, in accordance with the decision of this Court in Grant v Downs, a privileged communication." (citation omitted) 19McHugh J stated, at 553: "Part of a protected communication may even be a document that was created for a non-privileged purpose but which has been given to, and is in the custody of, a lawyer for the purpose of obtaining legal advice or for confidential use in litigation. As Mason J, with whose judgment Barwick CJ, Stephen, Jacobs and Aickin JJ agreed, pointed out in National Employers' Mutual General Insurance Association Ltd v Waind, '[d]ocuments submitted by the client to his solicitors for advice or for use in anticipated litigation attract the privilege'." (citation omitted) 20On Mr Collett's evidence, they were documents provided to MacGillivrays for the purpose of obtaining legal advice or assistance. I note only that Mr Collett's evidence has not been subject to cross-examination. In my opinion, if the documents in MacGillivrays' possession that fell within the terms of the subpoena were copies, those documents are privileged. 21Mr Condon did not assert that the documents in MacGillivrays' possession were privileged if they were original documents. This is of importance, as the subpoena sought production of original documents and if the originals were not available, copies of the specified documents. However, at the time that MacGillivrays produced the documents pursuant to the subpoena, they advised the Registrar by letter that they had not ever had possession of the original documents. Accordingly, on the basis that the documents in MacGillivrays' possession were copy documents, provided to or produced by them in the circumstances to which Mr Collett deposed in his affidavit, I find that those documents are privileged in accordance with the principle in Propend. 22Neither party directed any submission to the draft documents that were produced. Mr Collett deposed that those documents were created by MacGillivrays for Sherwood on Sherwood's instructions. Those documents, in my opinion, are privileged on the usual principles that govern legal professional privilege. Was the privilege waived? 23Mr Levy contended that even if documents are privileged, privilege has been waived. This argument can be disposed of briefly, although it requires an understanding of what occurred in respect of an earlier subpoena to a different firm of solicitors, Hardings Lawyers, for the production of documents in its possession relating to Sherwood. 24During the course of the proceedings before the trial judge, Mr Levy caused a subpoena to issue to Hardings Lawyers, the solicitors who were retained on behalf of Sherwood in 2002-2003. Sherwood claimed privilege in respect of those documents (the Harding documents). In an affidavit filed 28 July 2009, Mr Huston, who was then a director of Sherwood, claimed privilege for the Hardings documents on the basis that they were communications between Hardings Lawyers, Swiss and Polish lawyers, Mr Huston, Mr Bablis, Mr Black, and Mr Collett concerning the recovery of funds by Sherwood in Switzerland. The documents for which privilege was claimed were listed in Schedule A to Mr Huston's affidavit. 25The privilege claim was heard by the trial judge on 27 July 2009. Mr Condon of counsel appeared on the return of the subpoena, having inspected the documents for which privilege was claimed. 26The claim for privilege was again before his Honour on 29 July 2009. On that occasion, Mr Condon informed the court that whilst Mr Bablis was a former director of Sherwood, he had resigned as a director of that company on 15 July 2009. Mr Condon informed the trial judge that he was therefore not in a position to appear on the return of the subpoena and that his client had no interest in the claim for privilege, which was the privilege of Sherwood. 27There was then independent representation for Sherwood and the claim for privilege was maintained in respect of the documents that remained in contention. By that stage, the claim for production of documents had been reduced to two documents, identified as documents 28 and 33 in the Schedule. The trial judge inspected both documents. His Honour described the documents as being communications between solicitors acting on behalf of Sherwood and foreign solicitors giving advice to Sherwood about legal proceedings. 28His Honour observed that the advice was about the legal effect of documents that included public documents or documents likely to be found on the website of a foreign country. Nonetheless, his Honour considered that advice about such documents would still be confidential communications that attracted client privilege. Accordingly, his Honour upheld the claim for privilege of the two documents in question. 29As I have said, the subpoena under consideration on this application was issued to MacGillivrays, who were retained by Sherwood in 2003 to advise it and act on its behalf to recover funds in Switzerland. 30Mr Levy contended that the Hardings documents were the same documents for which privilege was claimed by MacGillivrays and that those documents had been inspected by a third party, namely, Mr Bablis, Mr Bablis not being a director of Sherwood at the time his counsel inspected the documents. 31An inspection of Schedule A listing the Hardings documents reveals that there is no commonality between those documents and the documents referred to in Schedule A to Mr Collett's affidavit. The waiver argument must therefore fail. It is unnecessary to consider, therefore, whether the inspection occurred through mistake and if so, whether privilege was thereby waived: see Mann v Carnell [1999] HCA 66; 201 CLR 1. Conclusion 32Accordingly, I uphold the claim for privilege in respect of the documents produced pursuant to subpoena dated 2 September 2011 addressed to MacGillivrays and order that the appellant Mr Levy not have access to those documents. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 30 May 2012