Whittenbury v Vocation Limited (No 2)

• Jurisdiction: Australia Federal only
• Judge: MIDDLETON J
• Judgment Date: 15 May 2020
• Neutral Citation: [2020] FCA 653
• Court: Federal Court
• Date: 15 May 2020

FEDERAL COURT OF AUSTRALIA

Whittenbury v Vocation Limited (No 2) [2020] FCA 653

File number:	VID 434 of 2015
Judge:	MIDDLETON J
Date of judgment:	15 May 2020
Catchwords:	CORPORATIONS – discovery – claim of privilege by liquidators – powers of liquidators to assert and waive legal professional privilege ; PRACTICE AND PROCEDURE – discovery – legal professional privilege – standing to claim privilege – whether liquidator has power to assert or waive privilege on behalf of company – costs follow the event – mixed outcome
Legislation:	Corporations Act 2001 (Cth) Federal Court Rules 2011 (Cth)
Cases cited:	Re Dallhold Investments Pty Limited (1994) 53 FCR 339 Dodds Family Investments Pty Ltd (formerly Solar Tint Pty Ltd) v Lane Industries Pty Ltd (1993) 26 IPR 261 Lenning v Alexander Proudfoot Company World Headquarters [1991] NSWCA 172
Date of hearing:	Determined on the papers
Registry:	Victoria
Division:	General Division
National Practice Area:	Commercial and Corporations
Sub-area:	Corporations and Corporate Insolvency
Category:	Catchwords
Number of paragraphs:	36
Counsel for Cheryl Whittenbury:	Ms K Burke
Solicitor for Cheryl Whittenbury:	Slater and Gordon
Counsel for Vocation Limited:	Ms S Gory
Solicitor for Vocation Limited:	Gilbert + Tobin
Counsel for PricewaterhouseCoopers (A Firm):	Mr M C Garner
Solicitor for PricewaterhouseCoopers (A Firm):	Herbert Smith Freehills
Counsel for John S Dawkins:	Mr M Pesman SC
Solicitor for John S Dawkins:	Baker McKenzie
Counsel for Stephen J Tucker, Michelle K Trenenick and Douglas J Halley:	Mr Blazer
Solicitor for Stephen J Tucker, Michelle K Tredenick and Douglas J Halley:	Allen & Overy

ORDERS

		VID 434 of 2015
BETWEEN:	CHERYL WHITTENBURY Applicant
AND:	VOCATION LIMITED (ACN 166 631 330) First Respondent ; PRICEWATERHOUSECOOPERS Second Respondent ; MARK EDWARD HUTCHINSON (and others named in the Schedule) Third Respondent
AND BETWEEN:	VOCATION LIMITED (ACN 166 631 330) Cross-Claimant
AND:	THE PARTNERS OF JOHNSON WINTER & SLATTERY Cross-Respondent

JUDGE:	MIDDLETON J
DATE OF ORDER:	15 May 2020

THE COURT ORDERS THAT:

1. On or before 4:00pm on 22 May 2020, the parties confer, and provide an agreed minute of order reflecting the reasons in this judgment, or if there is no agreement, brief written submissions as to the appropriate orders to make.

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

REASONS FOR JUDGMENT

MIDDLETON J:

INTRODUCTION

1. By interlocutory application dated 20 December 2019, the Second Respondent (‘PwC’) sought orders pursuant to r 20.32 of the Federal Court Rules 2011 (Cth) (the ‘Rules’) that unredacted copies of certain documents over which claims of privilege have been made by the First Respondent (‘Vocation’) be produced for inspection (‘PwC’s Application’). PwC’s Application was supported by the affidavit of Gregg Nicholas Rowan affirmed on 20 December 2019 (the ‘December Rowan Affidavit’).

2. On 26 February 2020, PwC filed written submissions in support of PwC’s Application (‘PwC’s February Submissions’).

3. On the return of PwC’s Application on 28 February 2020, the Court made orders, including orders substantially in the terms sought by PwC in PwC’s Application and in PwC’s February Submissions.

4. The orders made by the Court on 28 February 2020 differed only in two respects from the orders sought by PwC. First, the orders gave Vocation the ability to amend ‘Vocation’s Privilege List’, being the list of documents over which Vocation now maintains a privilege claim. Secondly, the orders carved out from production the 15 documents referred to in paragraph 6 of the affidavit of Holly Johanna Hurwood affirmed on 18 February 2020 (the ‘Hurwood Affidavit’) filed on behalf of the Fourth, Fifth and Sixth Cross-respondents to the Third Cross-claim, former non-executive directors of Vocation (the ‘NEDs’). The dispute between PwC, Vocation and the NEDs concerning whether an order for production of those documents should be made was to be deferred.

5. In addition to seeking inspection of certain documents, PwC now seeks an order that Vocation pay its costs of and incidental to PwC’s Application. In support of its costs application, PwC relies also on the further affidavit of Mr Rowan affirmed on 19 March 2020 (the ‘March Rowan Affidavit’).

6. The only remaining issues then in respect of PwC’s Application are the costs of that application and whether the production orders made on 28 February 2020 should also extend to 12 of the 15 documents referred to in paragraph 6 of the Hurwood Affidavit.

7. Both of these issues were agreed by the relevant parties could be dealt with by the Court on the papers.

PRODUCTION OF DOCUMENTS FOR INSPECTION

8. As to the production of further documents the position is as follows.

9. Two of the 15 documents in question were included in Vocation’s original privilege list. In light of communications between PwC’s solicitors and Vocation’s solicitors following the hearing on 28 February 2020, PwC does not at this time press for production of those two documents.

10. In respect of the remaining 13 documents, which were not included in Vocation’s original privilege list, PwC’s position at the hearing on 28 February 2020 was that an order for production of those documents should be made.

11. Since the hearing on 28 February 2020, production of one of the remaining 13 documents, is no longer resisted, being JWS.508.002.2008.

12. This leaves the other 12 documents which were not included in Vocation’s original privilege list.

13. In my view, the liquidators of Vocation no longer maintain any privilege claim in respect of those 12 documents, and the evidence sought to be adduced by the NEDs cannot be deployed by them to establish a claim of privilege where the privilege holder itself no longer makes such a claim. The privilege is that of the company, not of the NEDs; the former non-executive directors have no standing to advance a privilege claim on behalf of Vocation which the company itself no longer advances.

14. At the hearing on 28 February 2020, the NEDs in seeking to provide evidence in support of Vocation’s privilege claim relied upon the fact that the liquidators simply did not oppose orders being made requiring Vocation or any of the other respondents or cross-respondents to produce those documents (rather than the liquidators’ position being that they did not press any privilege claim in respect of those documents). In their written submissions dated 18 March 2020, the NEDs relied on the distinction between not opposing production orders, on the one hand, and not pressing privilege claims, on the other.

15. PwC has made it clear that it seeks production of the remaining 12 documents not on the basis that privilege in those documents has been waived, but rather on the basis that the liquidators do not press a privilege claim in respect of any of...