December 5, 2021

T-Break

Let'S Talk Law

When can a beneficiary claim joint legal expert privilege more than assistance attained by a trustee?

The judgment in the the latest scenario of Kayler-Thomson v Colonial Initially Condition Investments Constrained (No 2) [2021] FCA 854 (Kayler-Thompson) gives clarification on the concepts concerning joint lawful qualified privilege in the context of superannuation money and course steps.

In Kayler-Thomson, agent proceedings (also identified as course actions) ended up introduced from Colonial Initial Point out Investments Constrained (Colonial), among other folks, about its conduct as a trustee of two superannuation funds (Resources).

Colonial furnished discovery but claimed legal experienced privilege more than a “considerable number” of discoverable paperwork and resisted inspection of all those paperwork by the solicitors acting for the direct applicant, Mr Kayler-Thomson.

Mr Kayler-Thomson then sought orders necessitating Colonial to deliver those files for inspection on the basis that, as a beneficiary of the Money representing other group associates, he was a joint holder of the privilege.

The nature of joint privilege between a trustee and a beneficiary

In this situation, Colvin J verified that joint privilege arises the place:

  • a lot more than just one social gathering seeks tips or
  • the advice is sought by a get together who has a responsibility or obligation to disclose the written content of the conversation to the other events.

Between a trustee and a beneficiary, authorized specialist privilege is held jointly when the trustee seeks authorized advice in discharge of a duty, enforceable in fairness, and undertakes the thanks and correct administration of the have confidence in.

Concerns in this dispute

1. Are the ideas with regards to joint privilege between a trustee and a beneficiary confined to tiny trusts with several identifiable beneficiaries who have vested interests?

Colonial submitted that joint privilege amongst the trustee and the beneficiaries is confined to situations exactly where the belief being administered is a “closed have confidence in with a acknowledged and comparatively static cohort of beneficiaries”. Nevertheless, Colvin J turned down this argument, noting that it was not supported by any cited authority.

His Honour held that superannuation funds are needed to be held inside of a believe in composition and that the regulation applies regardless of the amount of users of a unique superannuation fund.

2. In a class motion, can a agent applicant inspect discoverable files about which a claim to privilege has been built on the basis that one particular or extra of the class users hold joint privilege with the making bash, even nevertheless the representative applicant is not a holder of the joint privilege?

Mr Kayler-Thomson approved that he had no ‘personal’ right of joint privilege about the documents in query. On the other hand, he claimed that as to each individual of the documents, one particular or additional of the group associates did keep joint privilege with Colonial, thus, as the agent applicant in the proceedings, he was entitled to inspect the files for the applications of the class motion.

Colonial argued that Mr Kayler-Thomson was not entitled to specific obtain to the privileged paperwork as a consultant applicant. As an alternative, Colonial argued that Mr Kayler-Thomson was needed to create a particular right of joint privilege to gain accessibility to the files.

Colvin J acknowledged Colonial’s argument, stating that he was not persuaded that a representative applicant has joint privilege in lawful guidance, only on the basis that other course members have that privilege.

His Honour observed that the “common law appropriate is individual to the joint holders of the privilege. It is a appropriate that can’t be asserted by an agent or representative of the privilege holder with out the authority of the privilege holder”.

In all those conditions, Colvin J held that:

“…there are two troubles for Mr Kayler‑Thomson if he is not himself the holder of the joint privilege. Very first, it is properly recognized that a joint privilege can only be waived by the steps of all holders of the privilege. Authority conferred by beneficiaries who are holders of joint privilege but not by Colonial as the other joint holder would not be ample for Mr Kayler‑Thomson to acquire accessibility to the files except there was some statutory abrogation or curtailment of the privilege. Next, the provisions of Component IVA of the Federal Courtroom of Australia Act 1976 (Cth) anxious with consultant proceedings have no express provision altering the typical regulation suitable to authorized specialist privilege”.

Consequence

His Honour concluded that “the procedural traits of a agent motion and the standing of the agent applicant cannot be called in assist to confer a suitable on a representative social gathering to accessibility files the subject of authorized professional privilege that is not jointly held with the agent party”.

As a outcome, Colonial did not have to produce any of the disputed files for inspection.

Vital takeaway

Beneficiaries of trusts, including users of superannuation money, can be confident that they can claim joint privilege over information obtained by the trustee irrespective of the measurement of the belief.

Nevertheless, group members of course steps do not have joint privilege in excess of documents just since other members of the course are entitled to assert lawful professional privilege over paperwork.