Saturday 30 March 2013

Attorney General/ Conflict of Interest/ AGIS

So who would have thought..................................
The federal Attorney General has  a conflict of interest !!!!!
The whole position of Attorney General is to  cover up corrupt conduct in Government Agencies

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JRD Ghalloub V Anthony Ghalloub/ Federal Court





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Senator Doug Cameron


This is the Labor Senator who ensured a corrupt Ian Macdonald  was pre-selected into the NSW Parliament to continue  to take bribes and continue his corruption.
Despite being made aware that Ian Macdonald was corrupt and also despite the fact that his daughter Fiona worked for Macdonald, the best free show in NSW this week was  when  Senator Cameron faced ICAC  and denied he had been made aware of the corruption and this " rocked him to the core."
Maybe it only "rocked him to the core" because he had not been given part of the ACTION.
A quick google search clearly shows this fucker has done little in Parliament except call for the Government to increase taxes and to support the New Government Media Bill.
It is now obvious why the Labor Government wants the media Bill passed so they could protect corruption  such as this with Ian Mcdonald which was  supported  by a Federal Senator.
Perhaps it is because Senator Cameron has such an atrocious accent that nobody listens to him!!!!!!!!!!!

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Tuesday 26 March 2013

Lockwood V Vince/ FCA/ Objection to discharge

FEDERAL COURT OF AUSTRALIA

Lockwood v Vince [2007] FCA 1946


BANKRUPTCY– failure to disclose income – whether payments to a bank account over which the bankrupt has no control are income – whether trustee may rely on evidence not referred to in notice of objection to discharge – withdrawal of notice of objection

WORDS AND PHRASES – income


Bankruptcy Act 1966 (Cth) ss 5, 139L, 139U, 149A, 149C, 149D


Clyne v Deputy Commissioner of Taxation (1984) 154 CLR 589
Commissioner of Taxation (Cth) v Myer Emporium Ltd (1987) 163 CLR 199
Cummings v Claremont Petroleum NL (1996) 185 CLR 124
Hayes v Federal Commissioner of Taxation (1956) 96 CLR 47
James v Oxley (1939) 61 CLR 433
National Commercial Banking Corporation of Australia Ltd v Batty (1986) 160 CLR 251
Prentice v Wood (2002) 119 FCR 296
Re Hall (1994) 14 ACSR 488
Scott v Federal Commissioner of Taxation (1966) 117 CLR 514
Squatting Investment Co Ltd v Federal Commissioner of Taxation (1953) 86 CLR 570






DAVID NEIL LOCKWOOD v PETER ROBERT VINCE (AS TRUSTEE OF THE PROPERTY OF DAVID NEIL LOCKWOOD, A BANKRUPT)

VID 791 of 2007



FINKELSTEIN J
7 DECEMBER 2007
MELBOURNE
IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY
VID 791of 2007

BETWEEN:
DAVID NEIL LOCKWOOD
Applicant
AND:
PETER ROBERT VINCE (AS TRUSTEE OF THE PROPERTY OF DAVID NEIL LOCKWOOD, A BANKRUPT)
Respondent

JUDGE:
FINKELSTEIN J
DATE OF ORDER:
7 DECEMBER 2007
WHERE MADE:
MELBOURNE


THE COURT ORDERS THAT:

1.                  Within 14 days the respondent take all necessary steps to withdraw the Notice of Objection to the discharge of the bankruptcy of the applicant.
2.                  The costs of this application be reserved.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY
VID 791 of 2007

BETWEEN:
DAVID NEIL LOCKWOOD
Applicant
AND:
PETER ROBERT VINCE (AS TRUSTEE OF THE PROPERTY OF DAVID NEIL LOCKWOOD, A BANKRUPT)
Respondent

JUDGE:
FINKELSTEIN J
DATE:
7 DECEMBER 2007
PLACE:
MELBOURNE

REASONS FOR JUDGMENT
1                     The applicant became a bankrupt on 4 June 2004 when the Official Receiver accepted the bankrupt’s own petition which he had presented under s 55 of the Bankruptcy Act 1966 (Cth).  The applicant was due to be discharged from his bankruptcy on 5 June 2007:  s 149.  However, on 25 May 2007 the trustee filed with the Official Receiver a written notice of objection to the discharge.  The effect of the objection, if not withdrawn or cancelled, is to extend the bankruptcy for eight years:  s 149A(2)(a)(i).  The bankrupt seeks an order under s 178 that the trustee withdraw the objection or that it be declared null and void.
2                     A notice of objection is required to comply with s 149C.  That section provides that the notice must set out the grounds of objection being one or more of the grounds listed in s 149D, refer to the evidence or other material that establishes those grounds and state the trustee’s reasons for objecting to the discharge on those grounds.  However, the notice need not state reasons if the objection is made on certain grounds including that specified in s 149D(1)(e): s 149C(1A).
3                     The ground upon which the trustee relied is that “the bankrupt failed to disclose any particulars of income or expected income as required … by section 139U”:  see s 149D(1)(e).  Section 139U is found in Div 4B of Pt VI.  This division provides that a proportion of a bankrupt’s income is to be distributed to his creditors.  Income is defined in s 139L to have its ordinary meaning.  In addition to its ordinary meaning, s 139L deems certain receipts to be income for the purposes of the division.  Among the receipts deemed to be income is “the value of a benefit that:  (A) is provided in any circumstances by any person (the provider) to the bankrupt; and (B) is a benefit within the meaning of the Fringe Benefits Tax Assessment Act 1986 as in force at the beginning of 1 July 1992 … being that value as worked out in accordance with the provisions of that Act but subject to any modifications of any provisions of that Act made by the regulations under this Act.”:  s 139L(1)(a)(v). 
4                     A bankrupt is required periodically to provide to his trustee a statement setting out, among other things, the income that he has derived during a particular period, referred to in the Bankruptcy Act as a “contribution assessment period”:  s 139U(1).  Income that a bankrupt “derives” includes income that is not actually received by the bankrupt.  It includes income that “is dealt with on behalf of the bankrupt or as the bankrupt directs”:  s 139M(1)(c).
5                     For the purposes of this application the relevant contribution assessment period is 4 June 2005 to 3 June 2006.  In his statement provided pursuant to s 139U the bankrupt said that the income he derived during the contribution assessment period was $55,000, being his gross earnings from his employment with Myohealth Pty Ltd and upon which he paid $12,111 by way of income tax.  In his notice of objection the trustee alleges that the bankrupt failed to disclose other income, namely twelve monthly payments of, respectively, $1,610 and $2,600 each that had been paid by Lockwood Investments (Australia) Pty Ltd into “two investment property loan accounts” with Westpac Banking Corporation.  Lockwood Investments is a company of which the bankrupt’s wife, Lisa Lockwood, is the sole director and shareholder.  It is the trustee of several trusts established for the benefit of the Lockwood family.  The objection states that:  “Disclosure of the payments received would have increased [the bankrupt’s] income by approximately $50,520 and generated a liability to pay income contributions.” 
6                     It is common ground that Lockwood Investments made the payments to which the notice refers.  The point in contention is whether the payments constituted income of the bankrupt.  To resolve that issue it is necessary, first, to relate some background facts.
7                     Immediately before his bankruptcy the bankrupt was indebted to Westpac in the sum of $967,328.  This amount was the aggregate of three facilities Westpac had provided to the bankrupt.  A separate account was maintained for each facility.  One was styled “Investment Property Loan” and the account number was 71-1129.  Westpac had advanced approximately $250,000 under this facility.  The periodic monthly payments of $1,610 were paid into this account.  The second facility was for approximately $350,000 and was also styled “Investment Property Loan”.  The account number was 71-1110.  Monthly payments of $2,500 were paid into this account.  The balance of the debt related to a commercial bill facility not mentioned in the notice of objection.
8                     Each facility is secured by a guarantee given by Mrs Lockwood.  The obligations under the guarantee are supported by a first ranking mortgage over a property in Melbourne at 15 Woodmasons Street, Malvern.  Mrs Lockwood is the registered proprietor of the Woodmasons Street property.  It is the family home where she, her husband and their children live.
9                     The effect of bankruptcy is to divest the bankrupt of his property and vest that property in his trustee and to make it available for the payment of his provable debts:  Cummings v Claremont Petroleum NL (1996) 185 CLR 124, 132.  Speaking strictly, the provable debts of the bankrupt may still be described as his debts but they will be released when the bankrupt is discharged from bankruptcy: Bankruptcy Act, s 153.  Accordingly, the debts are no longer debts that are owing by him:  Cummings at 137.  In Clyne v Deputy Commissioner of Taxation (1984) 154 CLR 589 the High Court said (at 594-595):  “The effect of the bankruptcy … is that the debtor is no longer obliged to pay his creditors; indeed he is disabled from doing so.  If he offered payment they could not safely accept it; their right is a right of proof against the estate.”
10                  The bankruptcy did not affect Mrs Lockwood’s liability under the guarantee, save that it may have been an event of default.  Whether or not it was, Westpac has been kept at bay because the interest on the loans continued to be paid as did a small amount to reduce the principal debt.  The interest was paid when Westpac applied the money that was deposited into account no 71-1129 and account no 71-1110 for that purpose. 
11                  The indirect source of the payments that found their way into the two accounts was Myohealth.  That company conducts a business as trustee of a unit trust.  The unit trust has three unit holders – Courten Pty Ltd, Jomolu Pty Ltd and Square Circle Pty Ltd.  This last-mentioned company is the trustee of a trust in which the bankrupt’s wife has an interest.  The bankrupt informed the trustee that he (the bankrupt) was “aware that this [t]rust may be associated with my spouse but not anything specific as to the [t]rust and its [d]eed.  However, its decisions are its alone and I do not have anything to do with this trust.”  I have no doubt that the bankrupt knows a lot about this trust.
12                  At any rate, each unit holder in the Myohealth Unit Trust received monthly payments of $15,833.  The Myohealth general ledger describes those payments as “unit trust distributions”.  It seems that the payments are either distributions of income or advances to unit holders on account of income. 
13                  Following the receipt by Square Circle of its distribution the amount was then paid into a banking account maintained by Mrs Lockwood.  From her account the money found its way into a bank account maintained by Lockwood Investments.  From that account $1,610 per month was paid into account number 71-11129 and $2,500 per month was paid into account number 71-1110.
14                  Upon these facts the first question that arises is whether the monthly payments were income derived by the bankrupt.  To reiterate, it will be income if it is income according to the ordinary meaning of that term (s 139L) or if the payments are deemed to be income by reason of s 139L(1)(a)(v), that is, if they have been “provided” to the bankrupt and are “benefits” within the meaning of the Fringe Benefits Tax Assessment Act.  The trustee also suggested that the payments might be deemed income by reason of s 139L(1)(a)(vi) as “loans” to the bankrupt by an associated entity.  Yet the trustee did not pursue the point – in particular, how and whether the definition of associated entity in ss 5 and 5B-5E would be met – and so I will not consider the issue further.
15                  Whether or not a payment is income according to ordinary concepts depends upon the characterisation of the payment in the hands of the recipient.  A payment will be income if it is received as a reward for the provision of services or for some other revenue producing activity:  Scott v Federal Commissioner of Taxation (1966) 117 CLR 514; Hayes v Federal Commissioner of Taxation (1956) 96 CLR 47; Squatting Investment Co Ltd v Federal Commissioner of Taxation (1953) 86 CLR 570.  That is, for a payment to be income the payment must be remuneration obtained from personal exertion (eg wages), from carrying on a business (eg profit) or from the use of capital (eg dividends, interest).
16                  The view that what the bankrupt received in this case was income (assuming, that is, that he received anything at all) rests on the assumption that the payments were periodic and regular.  The trustee relies on Commissioner of Taxation (Cth) v Myer Emporium Ltd (1987) 163 CLR 199, 215 where the High Court said:  “The periodicity, regularity, and recurrence of a receipt has been considered to be a hallmark of its character as income in accordance with the ordinary concepts and usages of mankind.”  But that is not a complete statement of what constitutes income.  As the other cases to which I have referred make plain, it is necessary that a payment relates to a person’s assets, or to employment, or to services rendered or to a business carried on to enable it to be treated as income.
17                  It is in any event doubtful whether it can be said the bankrupt was “provided” the amounts paid into the two accounts.  The accounts into which the money was paid were frozen.  That is, from the commencement of his bankruptcy the bankrupt was not permitted to deal with those accounts.  In particular he could not withdraw any money that had been deposited into either account.  Put another way, the accounts were not under his control.  What happened was that immediately upon money being deposited into either account it was applied by the bank in reduction of the principal and interest due on the relevant loan.  It could not in law be applied in discharge of the bankrupt’s indebtedness to the bank (as his debt to the bank was no longer payable by him personally).  On the other hand, it could be applied in discharge of Mrs Lockwood’s obligations under her guarantee.  On this basis it is difficult to see how it could be said the amounts had been “received” by the bankrupt.
18                  This approach receives support from National Commercial Banking Corporation of Australia Ltd v Batty (1986) 160 CLR 251 (Batty’s Case).  Davis and Batty had a partnership.  Davis, without the knowledge of Batty, fraudulently obtained funds from a client, Bushby, and deposited them into a partnership account at the bank.  When Bushby sued the bank to recover the funds, the bank sought indemnification from Batty. 
19                  Gibbs CJ (with whom Wilson, Brennan and Dawson JJ agreed) held, based on agency principles, that Batty could not be liable.  However, Gibbs CJ in obiter considered (at 264) the question of whether Batty could be liable “because the moneys went into the firm’s account, without his knowledge and without his actual or apparent authority” and “Batty did not deal with the money in any way nor expressly authorize anyone else to do so.”  Gibbs CJ concluded (at 268-269) that the nominal recipient:
“ought not to be liable unless ... he knew or ought to have known that he had possession or control of [the money].  In other words, where the defendant has not had the benefit of the money, has not played any part in disposing of it and was ignorant of the fact that it was theoretically under his control, he should not be liable in the absence of fault on his part.”

20                  In so concluding, Gibbs CJ relied (at 267-68) on what was said by Dixon J in James v Oxley (1939) 61 CLR 433, 456 to the effect that an accountholder who has no effective means of controlling the money in the account “may be regarded as never having really received it.”
21                  Dixon J also said (at 456) in a passage quoted with approval in Batty’s Case by Wilson J (at 270):
“In substance, money, though temporarily [in an account], may never be in the actual de facto control of any member of the firm except the fraudulent partner. ...  In such circumstances, the technical ‘receipt’ by the firm may be considered as insufficient to make payment into the account a receipt to the use of the [the accountholder].”

22                  In Batty’s Case, Brennan J employed a similar analysis.  He said (at 274):
“A bank which credits a customer’s account with the proceeds of a collected cheque has both accounted to the customer for the proceeds and borrowed the proceeds from the customer ....  The borrowing results in a credit item in favour of the customer in the account between the bank and its customer.  The debt represented by such item cannot exist unless the customer has authorized the bank to collect the cheque on behalf of the customer, to pay the proceeds of the collected cheque to and to borrow the proceeds from the customer, or the customer knows and acquiesces in the bank’s doing so.  Mr. Batty had no knowledge of the Bank’s collection of the cheques and crediting of the trust account.  The firm did not do anything to accept the credit and it derived no benefit from it.  It is not liable for money had and received to the use of the Bank merely by reason of the posting of a credit entry in a statement of account.”

23                  Both Dixon J and the majority in Batty’s Case did suggest that knowledge of the funds’ presence prior to withdrawal was key to the analysis of “receipt”, but the facts in those cases were that the accountholder would have had some ability to act on knowledge (ie, exercise control).  Here, on the other hand, the bankrupt may have had knowledge of the funds’ presence in his accounts, but had no ability to act on it.  Thus the fact of his knowledge should not be determinative.  This accords with the comments of Dawson J in Batty’s Case.  He said (at 299-300):
“The credit entry in the partnership bank account was, for the purposes of the claim for money had and received, sufficient to establish that the money was paid, but the question remained whether it was paid to the firm having regard to the circumstance that it was not in fact used in, and did not otherwise enter into, the course of the partnership business.  If that had been the case, then whether Mr. Batty knew of it or not, he would have been liable as a partner, but as it was not, the question was whether, as explained by Dixon J in James v Oxley, the receipt by the partnership of the money in its bank account was a mere technical receipt involving no de facto control on the part of Mr. Batty as a partner or whether he knew or ought to have known of its presence before it was withdrawn …”

24                  Again, the question of knowledge appears to presuppose an ability to act on that knowledge (by exercising control over the funds).  Because the bankrupt in this case could not act on his knowledge and exercise any control over the funds (because the accounts were frozen), the credit entry in the accounts may be regarded as a mere technical receipt rather than income.
25                  As regards the application of s 139L(1)(a)(v), it is certainly true that the word “benefit” is given a very wide meaning.  It is defined in s 136 of the Fringe Benefits Tax Assessment Act to include “any right (including a right in relation to, and an interest in, real or personal property), privilege, service or facility”.  But to fall within s 139L(1)(a)(v) the benefit must have been “provided … to the bankrupt”.  For the same reason that I reached the conclusion that the deposits had not been “received” by the bankrupt it cannot be said that he was provided with any benefit from the payments. 
26                  On behalf of the trustee it was argued that other kinds of benefits had been provided to the bankrupt during the contribution assessment period.  Those purported benefits include the provision of accommodation, cash payments made into a bank account other than the bank accounts mentioned in these reasons, and so forth.  I have not thought it appropriate to determine whether the trustee is correct in his assertion that other benefits had been received.  The reason for my not dealing with them is that the notice of objection only referred to the payments that were deposited into the two accounts and I did not think it permissible for the trustee on this application to rely on other benefits, not referred to, to support his objection: see Re Hall (1994) 14 ACSR 488, 492-493; Prentice v Wood (2002) 119 FCR 296, 299.  If the trustee’s claims are correct then they would need to be dealt with by the trustee in a further notice of objection.
27                  Accordingly, the orders I propose to make are that within 14 days the trustee take all necessary steps to withdraw his objection filed on 25 May 2007.  I have allowed 14 days within which the objection is to be withdrawn to enable the trustee to consider whether he wishes to file a further notice of objection.
28                  So far as the costs are concerned, I think they should for the time being be reserved.  The trustee picked up the possibility of the bankrupt having received other benefits during the course of preparing this case for trial.  It might turn out that the bankrupt has in fact withheld information from the trustee.  Only time will tell.  I do not propose to consider costs until I know whether or not the trustee intends to file another notice of objection.  I will leave it to the parties to make submissions on costs at an appropriate time. 

I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein.


Associate:

Dated:         7 December 2007


Counsel for the Applicant:
G T Bigmore QC
M J Galvin


Solicitor for the Applicant:
Madgwicks


Counsel for the Respondent:
P Cawthorn


Solicitor for the Respondent:
Serry White & Co


Date of Hearing:
19 and 20 November 2007


Date of Judgment:
7 December 2007

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Boensch V Pascoe/ Federal Court Australia


 FEDERAL COURT OF AUSTRALIA


Boensch v Pascoe [2007] FCA 532


PRACTICE AND PROCEDURE – privilege – legal professional privilege – production of documents by solicitor in response to s 77A bankruptcy notice – inadvertent tender of documents by counsel – whether waiver of privilege



Bennett v Chief Executive Officer of the Australian Customs Service (2004) 140 FCR 101 referred to
DES (Holdings) Pty Limited v Intertan Inc [2003] FCA 384 referred to
Hooker Corporation Ltd v Darling Harbour Authority (1987) 9 NSWLR 538 referred to
Lombe v Pollack [2004] FCA 264 referred to
Mann v Carnell (1999) 201 CLR 1 followed
Van Zonneveld v Seaton [2004] NSWSC 960 referred to



FRANZ BOENSCH v SCOTT DARREN PASCOE AND SABINE BOENSCH
NSD 2356 OF 2006

JACOBSON J
16 APRIL 2007
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
NSD 2356 OF 2006

On appeal from the Federal Magistrates Court

BETWEEN:
FRANZ BOENSCH
Appellant

AND:
SCOTT DARREN PASCOE
First Respondent

SABINE BOENSCH
Second Respondent


JUDGE:
JACOBSON J
DATE OF ORDER:
16 APRIL 2007
WHERE MADE:
SYDNEY

THE COURT ORDERS THAT Orders 1, 3 and 4 sought in the appellant’s notice of appeal filed on 13 February 2007 be made.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
NSD 2356 OF 2006

On appeal from the Federal Magistrates Court

BETWEEN:
FRANZ BOENSCH
Appellant

AND:
SCOTT DARREN PASCOE
First Respondent

SABINE BOENSCH
Second Respondent


JUDGE:
JACOBSON J
DATE:
16 APRIL 2007
PLACE:
SYDNEY

REASONS FOR JUDGMENT
Introduction
1                     The real issue in this appeal can be stated shortly.  It is whether the tender by counsel of six documents, forming part of a 73 page exhibit, constituted a waiver of privilege in the six documents.
2                     Ironically, the issue arose at first instance in the course of an application to claim privilege over a separate part of the 73 page exhibit.  The learned Federal Magistrate found that legal professional privilege had been waived in the six documents.  His Honour said, at [11] of his judgment of 22 November 2006, that counsel for the party who tendered the documents “specifically eschewed” any suggestion of inadvertence in the tender.  He proceeded on the basis that the tender was deliberate.
3                     The appellant, Mr Boensch, contends that his Honour was in error in concluding that the tender was deliberate and that any claim of inadvertence had been eschewed.  Mr Boensch submits that, upon the proper application of the principle stated by the High Court in Mann v Carnell (1999) 201 CLR 1 at 13, there was no implied or accidental waiver of privilege in the six documents.
4                     The essential reason why this issue arises is the failure of the solicitor who produced the documents to the first respondent, Mr Pascoe, and to the Court, to make proper enquiry as to the extent of the materials comprised within the documents that were produced and tendered.
5                     In the hope of maintaining clarity in my analysis of the question, I will endeavour to distinguish between the documents produced or referred to at various stages of the proceeding.
6                     The critical documents, for the purpose of this judgment, fall into three categories.  The first category is the six documents that were tendered as part of Exhibit JL1.  I will call them the Extra Documents.  The second category is certain documents produced to Mr Pascoe and described in my reasons as the First Documents.  The third category is certain documents described as Exhibit SDP6 in the application heard before his Honour on 22 November 2006.
The Background Facts
7                     Mr Boensch is a bankrupt.  Mr Pascoe is his trustee in bankruptcy.  The second respondent, Mrs Boensch, is Mr Boensch’s wife.
8                     On or about 30 August 2005 Mr Pascoe gave a notice under s 77A of the Bankruptcy Act 1966(Cth) to the former solicitor for Mr and Mrs Boensch, Mr James Leong.  That section of the Act provides for compulsory production of the documents and records of a bankrupt whose examinable affairs are under investigation.
9                     On or about 30 September 2005 Mr Leong answered the s 77A notice by providing a number of documents to Mr Pascoe.  I will call the documents that were produced to Mr Pascoe in answer to the notice “the First Documents”.
10                  Mr Leong’s evidence before the Federal Magistrate was that he did not obtain any instructions from Mr Boensch before answering the s 77A notice.  Accordingly, Mr Leong had no instructions to claim privilege, nor does he appear to have made such a claim when he produced the First Documents to Mr Pascoe.  Moreover, he did not have instructions to waive privilege.
11                  Nearly ten months later, on 19 July 2006, Mr Pascoe commenced proceedings in the Federal Magistrates Court against Mr and Mrs Boensch seeking orders under ss 120 and 121 of the Bankruptcy Act setting aside certain transactions entered into between Mr and Mrs Boensch prior to the date of the sequestration order.
12                  The application filed in the Federal Magistrates Court was supported by an affidavit sworn by Mr Pascoe.  Exhibited to the affidavit was a bundle of documents produced to Mr Pascoe by Mr Leong in answer to the s 77A notice.  The documents were described as Exhibit SDP6.  I will refer to those documents as Exhibit SDP6 in these reasons.
13                  Counsel for Mr Boensch submits that the documents in Exhibit SDP6 are a subset of the First Documents.  I have not inspected Exhibit SDP6 but the description of them in Mr Pascoe’s affidavit filed on 19 July 2006 in the Federal Magistrates Court, as a bundle of file notes of meetings or conversations, indicates that the submission is correct.
14                  The matter came before Federal Magistrate Raphael for directions on 15 August 2006.  The legal representatives for Mr and Mrs Boensch stated that a claim for privilege was to be made over the documents contained in Exhibit SDP6.  His Honour directed that any application in relation to the admissibility of Exhibit SDP6 be filed by 5 September 2006.
15                  On 8 September 2006, Mr and Mrs Boensch filed a document entitled “Amended Interim Application” seeking inter alia a declaration that the documents comprising Exhibit SDP6 were documents to which legal professional privilege attaches.  His Honour then made an order for the determination of that issue, and an associated question, as a separate question under Part 17 of the Federal Magistrates Court Rules 2001.  His Honour also referred to the hearing of a preliminary question under s 189 of the Evidence Act 1995, although it is difficult to see how the occasion for such a hearing had arisen.
16                  On 20 November 2006 the solicitor for Mr and Mrs Boensch served on Mr Pascoe’s solicitor a draft statement of evidence of Mr Leong.  An exhibit, referred to as Exhibit JL1 to the statement, was not served at that time but was adopted by Mr Leong when he was called to give evidence before Federal Magistrate Raphael on 21 November 2006.  The exhibit appears to have been provided to Mr Pascoe’s legal representatives shortly before the hearing.
Mr Leong’s statement
17                  Exhibit JL1 to Mr Leong’s statement contained 73 pages of documents.  Reference was made in the statement to all of the pages of Exhibit JL1.  That exhibit included the Extra Documents.  Exhibit JL1 is not identical with Exhibit SDP6 or with the First Documents.  I will continue to refer to it as Exhibit JL1.
18                  Mr Leong’s statement concluded by stating in [51] that:
“All the documents exhibited to this statement are documents I produced to Scott Pascoe in answer to the Notice.”
19                  The only documents exhibited to the statement were those contained in Exhibit JL1.  As I have said, they included the Extra Documents.  It is apparent that the Extra Documents did not form part of the First Documents, namely those produced to Mr Pascoe in answer to the s 77A notice.
20                  [50] of Mr Leong’s statement was as follows:
“By this statement I do not intend to disclose any confidential communications for which legal professional privilege may otherwise be properly available.  I do not intend to waive any legal professional privilege otherwise properly available.”
The Proceeding before the Federal Magistrate
21                  Mr Leong was called by counsel for Mr Boensch to give evidence on 21 November 2006.  Counsel tendered, through the witness, the statement and the exhibit, that is Exhibit
JL1.  They were marked together by his Honour as Exhibit 1
22                  Mr Pascoe’s counsel, Mr Johnson, cross-examined Mr Leong.  Mr Johnson showed Mr Leong a copy of the documents sent to Mr Pascoe on 30 September 2005, that is to say, the First Documents.  Mr Johnson then put to the witness that the content of [51] of his statement was not correct. 
23                  That is to say, Mr Johnson drew Mr Leong’s attention to the inaccuracy of the statement in [51] which assumed, incorrectly, that Exhibit JL1 was identical to the First Documents.  However, Mr Leong failed to understand this and said that [51] was correct.
24                  In the course of argument Mr Johnson informed his Honour that the documents in
JL1 included documents that had not previously been disclosed to Mr Pascoe.  He stated that privilege had been waived “on all of these documents for this application”.  That is to say, Mr Pascoe’s claim of waiver of privilege over the Extra Documents was first raised in the course of argument, after the tender of those documents. 
25                  When counsel for Mr Boensch, Mr Heath, realised the apparent error, he informed his Honour.  He said:
“I relied on paragraph 51.  If it now appears that in relation to 51 that answer is not correct --- ” 
26                  The following exchange then took place:
“HIS HONOUR:  Mr Heath, let us get this absolutely clear.  You are not being criticised.  These things happen.  What you are saying is the witness told you something ---
MR HEATH:  Yes.
HIS HONOUR:  --- contained in paragraph 51; right?
MR HEATH:  Yes, your Honour.
HIS HONOUR:  Relying upon that – this is what you say:  you gave the documents to Mr Johnson or his solicitors?
MR JOHNSON:  My recollection is that my friend’s instructing solicitor handed them to me, your Honour.
HIS HONOUR:  Whatever.  They got into your hands, Mr Johnson.
MR JOHNSON:  Yes.  Just so there can’t be a misunderstanding.
HIS HONOUR:  And as far as you were concerned they were to be dealt with as any other document in here.  And the way in which I am to deal with any document in here is to say either they are privileged or they are not and there is no different category of any of the documents in here; is that right?
MR HEATH:  That is so, your Honour.
HIS HONOUR:  Well, what has happened is that either you were misled or mistaken and you have inadvertently, you say, handed Mr Johnson some documents – additional documents that he had never seen before and for which you would have made a specific claim for privilege and never shown them to him if the facts had been revealed to you; is that right?
MR HEATH:  Yes.  If it is the case that paragraph 51 is incorrect ---
HIS HONOUR:  Well, I think it is, isn’t it, because he has admitted it.  Mr Johnson has asked him two questions; did you give these documents to Mr Pascoe?  Answer:  no.  In relation to both of these documents.
MR JOHNSON:  I think it: I can’t remember now.
HIS HONOUR:  Or:  I can’t remember.
MR JOHNSON:  It has dropped back to:  I can’t remember.
MR HEATH:  Yes.  But there is an issue about this now obviously.  That was my recollection.  There were some “don’t recalls”, in there in relation to this.  But if it is the case that paragraph 51 is wrong, then the issue of privilege in documents that are included in this but were not, in fact, produced to Mr Pascoe are now disclosed, then such disclosure is inadvertent.” (Emphasis added.)
27                  Later in argument Mr Heath said the following:
“Your Honour, thank you for the time in relation to this issue.  Your Honour, in my respectful submission, no issue of embarrassment or inadvertent disclosure of privilege arises and that is for these reasons.  First of all, one has to consider the context of the current proceedings before your Honour.  When I say “current proceedings” I mean, separate question, preliminary issue, voir dire, however it is to be characterised.  That is, the context of the present proceedings before your Honour today are the determination of whether privilege exists in certain documents.”
28                  The “certain documents” to which Mr Heath referred, were the documents in Exhibit SDP6.  They were the subject matter of the hearing, not the Extra Documents to which the argument moved only after they were tendered.
His Honour’s reasons for judgment
29                  His Honour said at [6] that the essence of Mr Johnson’s argument was that the tender of Exhibit 1, that is to say Mr Leong’s statement and the exhibit described as Exhibit JL1, was a voluntary act of counsel which had the effect of bringing into the public domain all the documents contained in Exhibit 1 (including the Extra Documents) and waiving any privilege therein.
30                  His Honour then observed at [7] that, as Mr Heath had correctly pointed out, this was a hearing solely to determine whether the contents of Exhibit SDP6 were the subject of privilege.
31                  His Honour went on to say at [9] that unfortunately the documents contained in Exhibit 1 were not confined to those in Exhibit SDP6.  He said that some of the documents in Exhibit 1 were new documents that had not previously been seen by Mr Pascoe (that is, the Extra Documents).
32                  The substance of his Honour’s reasons may be found in the following paragraphs:
“[10] What then is the situation with regard to those?  Mr Heath says that these documents are no different from SDP6 documents and that Mr Leong’s statement in paragraphs 50 and 51 is sufficient to provide privilege to them.  But I have difficulty with that.  The documents which are contained in the Exhibit are not the documents which are annexed to the statement.  I made it clear yesterday that I appreciated that the documents found in the Exhibit may have been placed there as a matter of inadvertence or for some other reason which might mitigate a loss of privilege. But those appearing for the respondents specifically eschewed such an approach.  All I am left with then is a deliberate tender of documents which could have been tendered under cover with no more than a description and added to the list of SDP6 documents if that was thought appropriate.  But it was not.
[11] It seems to me that in those circumstances the dicta of his Honour the Chief Justice in Birks [(1990) 19 NSWLR 677] at 683-684 would apply notwithstanding Mr Heath’s eloquent argument of the special nature of these proceedings.  It is an argument that I accept but only for those documents for which these proceedings applied, namely the documents in SDP6.”
33                  I granted leave to appeal from his Honour’s orders and judgment on 6 February 2007.
Whether there was a waiver of privilege over the Extra Documents
34                  The test of implied waiver of privilege was stated by the High Court in Mann v Carnell at [29].  Their Honours pointed to an intentional act of disclosure which was inconsistent with the maintenance of confidentiality in the communication.
35                  Their Honours went on to say that “[w]hat brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of confidentiality”. They said the test is “not some overriding principle of fairness operating at large”.
36                  Reference may also be made to the observations, to the same effect, by Gyles J in Bennett v Chief Executive Officer of the Australian Customs Service (2004) 140 FCR 101 at [68].  See also the review of the authorities by Allsop J in DSE (Holdings) Pty Limited v Intertan Inc [2003] FCA 384; and Lombe v Pollak [2004] FCA 264 at [30] – [33] dealing with the common law test.
37                  It is unnecessary for present purposes to determine whether or to what extent the provisions of s 122 of the Evidence Act dealing with the circumstances in which privilege may be lost correspond with the common law principles; see Mann v Carnell at [23]; see also Van Zonneveld v Seaton [2004]  NSWSC 960 at [11] (per Campbell J).
38                  It seems to me that on either approach, what is required is a voluntary act which is inconsistent with the purpose of maintaining confidentiality.  An inadvertent or unintentional act will not be sufficient to amount to waiver.
39                  Of course, “a mere plea” of inadvertence may not by itself necessarily enable a party to avoid a waiver of privilege; Hooker Corporation Ltd v Darling Harbour Authority (1987) 9 NSWLR 538 at 542-543.  Thus, the Court must be satisfied on the material before it that the act was in truth inadvertent.
40                  In the present case, inadvertence is established by the fact that even when cross-examined on the documents, Mr Leong did not realise that the documents in Exhibit
JL1 included the Extra Documents. 
41                  It was only when Mr Heath realised what had happened that he drew his Honour’s attention to the apparent inadvertence.  This is clear, in my view from the passages of the transcript that I have reproduced above.
42                  It is true that in the last passage of the transcript that I have reproduced at [27], Mr Heath said that no issue of inadvertence arose.  However, this was because, as Mr Heath correctly observed, the amended application before his Honour dealt only with the question of whether privilege could be maintained over Exhibit SDP6.
43                  With due respect to his Honour, whose judgment was given ex tempore, an examination of the transcript shows that Mr Heath did not eschew inadvertence in relation to the maintenance of the claim over the Extra Documents.
44                  Of course, I do not criticise his Honour for delivering ex tempore reasons.  It is merely that a full reading of the transcript puts in context the last passage of Counsel’s remarks on the issue of inadvertence.
45                  In any event, I would add that it is difficult to see how the tender of Exhibit JL1 was inconsistent with the maintenance of confidentiality.  It was tendered on an application to claim privilege and it was tendered with the express proviso in [50] of Mr Leong’s statement that he did not intend to disclose confidential communications to which privilege may attach.
46                  The tender of Exhibit JL1 cannot be said to have been to deploy the substance of legal advice for forensic or commercial purposes so as to reveal an implied inconsistency with the maintenance of confidentiality; Bennett at [68].
47                  I accept Mr Johnson’s submission that it is extraordinary that both solicitors and counsel for Mr Boensch failed to make any or any adequate enquiry as to the extent of the materials contained in Exhibit JL1.  Some criticism may flow from that.  But it does not preclude a finding of inadvertence.
48                  I do not accept Mr Johnson’s submission that the documents in Exhibit JL1 were delivered without qualification as to their status.  The qualification was stated in [50] of the statement to which the Exhibit was attached.  Although no evidence was put before his Honour to explain the mistake, the circumstances make it plain that error and inadvertence were revealed.
Orders
49                  I will make orders 1, 3 and 4 sought in the notice of appeal filed on 13 February 2007.

I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson.


Associate: 

Dated:              16 April 2007


Counsel for the Appellant:
N Perram SC with MJ Heath


Solicitor for the Appellant:
Wright Pavuk Lawyers


Counsel for the Respondent:
JT Johnson


Solicitor for the Respondent:
McLean & Associates


Date of Hearing:
6 February 2007


Date of Judgment:
16 April 2007
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