Nipps (Administrator) v Remagen Lend ADA Pty Ltd, in the matter of Adaman Resources Pty Ltd (Administrators Appointed) (No 3) [2021] FCA 628

Parties

Procedural Posture

Corporations/interlocutory Application / Interlocutory Application—production and Inspection of Documents, Privilege Claims

Legal Issues

1. 1 Whether legal professional privilege attaches to certain communications and documents prepared by in-house counsel for company officers/directors prior to the appointment of administrators.
2. 2 Whether the advice was given to directors in their personal capacity or as the directing mind and will of the company.
3. 3 Whether the presence of third parties (e.g. CEO, incoming administrator) in communications affected the privilege or confidentiality of those documents.

Ratio Decidendi

On the evidence, the lawyer-client relationship existed between Mr Madders and the Interested Parties in their personal capacity, not the company, for the purpose of receiving legal advice about their personal position and duties relating to corporate administration. However, due to uncertainties about the presence of non-directors/non-clients in some email communications and the potential loss of confidentiality, the Court determined that inspection of documents 1-8 is necessary to adjudicate the privilege claims. Privilege was upheld in respect of document 9, as the dominant purpose was confidential legal advice to individuals.

Court Disposition

Partly in favour of Interested Parties: inspection in part ordered

Orders

• Documents numbered 1 to 8 to be delivered in a sealed envelope to the Registry for confidential retention and later inspection by an allocated judge to consider privilege claims.
• Application is referred to the National Operations Registry for judicial allocation and inspection for privilege determination.