Sea Swift Pty Ltd v Torres Strait Island Regional Council

Here, the applicant sought declarations that six documents which had been disclosed by the respondent were not the subject of valid claims of legal professional privilege. In addressing whether the relevant documents had indeed been brought into existence for the dominant purpose of providing or receiving legal advice, Justice Kelly considered the common law discretion conferred upon the court to inspect documents and the circumstances in which legal professional privilege attaches to Litigation Funding Agreements.

Kelly J

18 July 2023

The documents which were said to be the subject of valid claims to legal professional privilege all related to invoices levying Default Maritime Fees sent from the respondent to the applicant. [3]. Pursuant to a Disclosure Order, the respondent was required to provide disclosure to the applicant of certain categories of documents. [7]. The respondent resisted production of a number of documents, citing legal professional privilege. [8]. Those documents included correspondence and redacted sections of a Litigation Funding Agreement. [10], [61].

Two of the six documents were especially contentious, the Litigation Funding Agreement and Document 38 which was described as an email “recording or evidencing consideration of the legality of a Default Maritime Fee or the decision to issue the Invoices”. [48]. The email was dated seven years prior to the issuance of the invoices. [50]. The applicant opposed the court receiving and reading the email on the basis that the respondent had not complied with r 213 Uniform Civil Procedure Rules 1999. [53].

His Honour accepted the applicant’s submissions that the evidence to support the claim of privilege in relation to the email was scant. [58]. Whilst the common law recognises that the Court may examine documents in order to determine questions of privilege, the task of supplying sufficient evidence to substantiate the claim rests with the party claiming privilege, and it is not the case that the inspection power is to be used in lieu of evidence (see Cargill Australia Limited v Viterra Malt Pty Ltd (No 8) [2018] VSC 193, [43]). Put simply, “a party claiming privilege cannot delegate to the Court the task of establishing that the privilege exists. Adequate materials must be put before the Court to allow the claim to be entertained” (see Tabcorp Holdings Limited v State of Victoria [2013] VSC 302, [97]). [55].

Having regard to the inadequacy of the substantiating evidence to support the claim of privilege, the Court declined to exercise the common law power to inspect the document and held that the document was not the subject of a valid claim. [58].

In considering whether the redacted sections of the Litigation Funding Agreement (entered into between the respondent and its litigation funder) relevantly attracted privilege, his Honour noted that the privileges said to be attached to them were litigation privilege and common interest privilege. The applicant argued that in the event it was compelled to disclose the redacted parts, its legal strategies in the Debt Recovery Proceedings together with commercially sensitive confidential information would be divulged. [61]. That could unfairly confer a tactical advantage on the applicant: see Marshall v Prescott [2013] NSWCA 152, [77] and [85] and Green in his capacity as liquidator of Arimco Mining Pty Ltd (in liq) v CGU Insurance Ltd [2008] NSWSC 390, [26].

His Honour accepted the thrust of the appellant’s argument. He held that whilst there is no general principle that legal professional privilege attaches to Litigation Funding Agreements in their entirety, in circumstances where disclosure might disclose “War Chest” information or a legal strategy, parts of such an agreement may be reasonably withheld. [63]-[64]. Albeit the document here did not clearly and distinctly identify or reveal the appellant’s legal strategy, it clearly contained information which would assist in piecing it together. [67]. His Honour formed the view that “to require the Council to disclose the redacted parts of the Litigation Funding Agreement would place the Council in a disadvantaged position compared to that of an ordinary litigant [and] … disclosure of the redacted parts of the material is not conducive to the proper administration of justice”. [68].

Disposition

The court declared that the email was not the subject of a valid claim of legal professional privilege however the redacted parts of the Litigation Funding Agreement were the subject of valid claims of confidentiality and were accordingly not required to be disclosed.

A Jarro