Carna Group Pty Ltd v The Griffin Coal Mining Company (No 2)

• Jurisdiction: Australia Federal only
• Judge: MCKERRACHER J
• Judgment Date: 18 December 2019
• Neutral Citation: [2019] FCA 2209
• Court: Federal Court
• Date: 18 December 2019

FEDERAL COURT OF AUSTRALIA

Carna Group Pty Ltd v The Griffin Coal Mining Company (No 2) [2019] FCA 2209

File number:	WAD 354 of 2018
Judge:	MCKERRACHER J
Date of judgment:	18 December 2019
Date of publication of reasons:	16 January 2020
Catchwords:	PRACTICE AND PROCEDURE – inspection of discovery - claim for legal professional privilege ; EVIDENCE – where claim is made by liquidator on basis of company’s documents – onus – whether discharged – whether hearsay evidence is admissible – whether company officers receiving advice or solicitor giving it or usual former solicitors should have sworn affidavit - whether disclosure of documents proving the facts to support the claim waives privilege
Legislation:	Evidence Act 1995 (Cth) ss 117, 117(1), 118(a), 118(b), 118(c), 122
Cases cited:	Apple Computer Australia Pty Ltd v Wily [2002] NSWSC 855 Gardner v Irwin. (1879) 4 Ex D 49 Re Global Advanced Metals Pty Ltd [2019] NSWSC 1545 Hancock v Rinehart [2016] NSWSC 12 Hastie Group Ltd (in liq) v Moore [2016] NSWCA 305 Jones v Dunkel (1959) 101 CLR 298 McKenzie v Cash Converters International Ltd [2017] FCA 1564 National Crime Authority v S (1991) 29 FCR 203 Tavcol Pty Ltd v Valbeet Pty Ltd [2016] NSWSC 1002
Date of hearing:	18 December 2019
Registry:	Western Australia
Division:	General Division
National Practice Area:	Commercial and Corporations
Sub-area:	Commercial Contracts, Banking, Finance and Insurance
Category:	Catchwords
Number of paragraphs:	30
Counsel for the Applicant:	Mr SK Dharmananda SC
Solicitor for the Applicant:	Clayton Utz
Counsel for the First Respondent:	Ms K McNally
Solicitor for the First Respondent:	McNally & Co
Counsel for the Second Respondent:	Mr AF Mizen
Solicitor for the Second Respondent:	Mizen + Mizen
Counsel for the Third Respondent:	Mr S Penrose
Solicitor for the Third Respondent:	Tottle Partners

ORDERS

		WAD 354 of 2018
BETWEEN:	CARNA GROUP PTY LTD ACN 063 629 630 (IN LIQUIDATION) Applicant
AND:	THE GRIFFIN COAL MINING COMPANY PTY LTD ACN 008 667 285 First Respondent ; RAJ KUMAR ROY Second Respondent ; JAMES RIORDAN Third Respondent
AND BETWEEN:	THE GRIFFIN COAL MINING COMPANY PTY LTD ACN 008 667 285 Cross-claimant
AND:	CARNA GROUP PTY LTD ACN 063 629 630 (IN LIQUIDATION) First Cross-Respondent ; HARRY CARNA Second Cross-Respondent ; MICHAEL GREY Third Cross-Respondent

JUDGE:	MCKERRACHER J
DATE OF ORDER:	18 DECEMBER 2019

THE COURT ORDERS THAT:

1. The third respondent’s interlocutory application, filed 28 November 2019, be adjourned with costs reserved.

2. The second respondent’s interlocutory application, filed 12 December 2019, be adjourned with costs reserved.

3. Order 2 sought by the first respondent’s interlocutory application, filed 29 November 2019, be dismissed with costs to be fixed.

4. There be liberty to apply.

5. Costs of the case management hearing be costs in the cause.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

MCKERRACHER J:

INTRODUCTION

1. The first respondent, The Griffin Coal Mining Company Pty Ltd, seeks further discovery or inspection of certain documents from the applicant, Carna Group Pty Ltd (in liquidation). At a case management hearing while making certain other orders made herewith and after hearing counsel for the parties and considering written and oral submissions, I dismissed the application for inspection. I considered that Carna had made out its claim for legal professional privilege in relation to the documents. These are my reasons.

EVIDENCE

2. Griffin seeks inspection of documents between Carna through its officers and employees and a solicitor, Mr Renato (Ronnie) Joseph Nardizzi. Griffin relies for evidentiary purposes on exchanges of correspondence, as does Carna. By Ms McNally’s first affidavit of 29 November 2019, she annexes a certificate from the Legal Practice Board of Western Australia indicating that Mr Nardizzi was certified practitioner on the Western Australian Roll of Practitioners. It is common ground that all material times Mr Nardizzi was an employee of Monadelphous Engineering Associates Pty Ltd. Prior to that time, he was engaged by another firm. At no time was Mr Nardizzi employed by Carna.

3. On 27 May 2019, Clayton Utz, solicitors for Carna, emailed Griffin’s solicitors indicating that certain communications were the subject of claims for legal professional privilege on the basis that those communications were brought into existence for the dominant purpose of obtaining legal advice. The claim pertained to emails between Mr Nardizzi, the legal practitioner said to be providing confidential and privileged advice to Carna and personnel of Carna in respect of which claims for legal professional privilege was raised on the basis ‘that they were brought into existence for the dominant purpose of obtaining legal advice’. Participants in the communications included Mr Mike Grey who was an officer of Carna. As will be seen, subsequently, Mr Grey has been a party to this proceeding being joined by Griffin, but the claim against him was discontinued. Mr Harry Carna is also a party to the proceedings, but has played no part at all in it. I infer that each of them was certainly not in the liquidator’s camp in the sense of being someone, who on the balance of probabilities would be likely to cooperate with the liquidator in providing information. Each may very well at one point have been in Carna’s ‘camp’, but clearly the position changed significantly when liquidators were appointed.

4. Ms McNally requested a copy of the engagement letter between Mr Nardizzi and his clients. Carna’s solicitors, Clayton Utz, indicated on 10 June 2019 that they had not been able to locate a copy of a retainer letter, but referred to an email from Griffin’s own discovery in which Mr Raj Kumar Roy of the Lanco Group referred to Mr Nardizzi as Carna’s lawyer. In addition, that email to Mr James Riordan (another party to this proceeding) dated 12 January 2014 said:

Discussions with Carna and their lawyer ([Mr Nardizzi]) went very transparently with [Mr Nardizzi] coming up with few risk issues for Carna. We have agreed in principles (sic) how to address those issue (sic) and Ronnie will send us the draft with those changes as next step.

…

5. By a second affidavit, sworn on 13 December 2019, Ms McNally annexed an email dealing with and rejecting Carna’s claim that it had not waived its privilege in correspondence of 10 December 2019 in relation to Mr Nardizzi. I will come to this correspondence shortly.

6. Griffin also purported to rely on an affidavit of Mr James Sprivulis, sworn on 11 December 2019 and filed on behalf of Carna. Relevantly, it referred to the 10 December 2019 correspondence mentioned above, stating that he did not intend to waive Carna’s legal privilege in any of the Nardizzi documents. The document produced, to the extent relevant, notes that pursuant to s 118(a) of the Evidence Act 1995 ...