Court found insufficient evidence to prove the communications' dominant purpose was legal advice
The NSW Supreme Court rejected a company's claim of legal professional privilege over subpoenaed documents in a fiduciary breach case, finding insufficient evidence to prove the communications' dominant purpose was legal advice.
The case centred on a company that provides plumbing and air-conditioning services, which alleged that a former director, along with other associated defendants, diverted significant work, customers, and staff to a separate company, damaging its financial performance. The proceedings, initiated in 2022, also involved allegations against the first defendant's spouse and related parties.
The privilege dispute arose after documents produced by a Queensland law firm, DuxRoe Pty Ltd, were claimed as confidential by the plaintiff company. The defendants challenged this claim, seeking access to documents labelled as Packet S-7, arguing that the plaintiff failed to prove the dominant purpose of the communications was for legal advice.
In its judgment, the NSW Supreme Court analysed whether the plaintiff met its burden to establish privilege. Drawing from established legal principles, it emphasized that the onus lies on the party claiming privilege to provide focused, specific evidence. The plaintiff relied on an affidavit from a company director, which described the documents as related to “legal advice in relation to certain taxation and other legal matters.” However, the court found this description overly vague and inadequate to substantiate the privilege claim.
The court noted a lack of testimony from key individuals involved in creating or receiving the communications, including lawyers and other professional advisors, further weakening the plaintiff’s position. It also rejected the plaintiff’s request for the court to inspect the documents, emphasizing that inspection is not a substitute for proving privilege through sufficient evidence.
The court concluded that the communications lacked the required clear, dominant purpose of obtaining legal advice, stating that assertions and generalized descriptions were insufficient. It also dismissed secondary arguments that the advice pertained to the personal interests of the director rather than the company. Ultimately, the court ordered that the defendants be granted access to the subpoenaed documents.
