The Joint & Several Liquidators of Kong Wah Holdings Ltd (in Compulsory Liquidation) v. The Hongkong and Shanghai Banking Corporation Ltd

Released for publication with parts redacted

HCCW 49/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 49 OF 2000

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______________________

BETWEEN

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AND

HCCW 50/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 50 OF 2000

______________________

______________________

BETWEEN

______________________

(Heard Together)

Before : Hon Kwan J in Chambers (not open to public)

Date of Hearing : 9 August 2007

Dates of Further Written Submissions : 13 and 16 August 2007

Date of Handing Down of Decision : 13 September 2007

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D E C I S I O N

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The application

1.This is an application by the liquidators of Akai Holdings Limited (“Akai”) and Kong Wah Holdings Limited (“Kong Wah”) (collectively “the Companies”) against The Hongkong and Shanghai Banking Corporation Limited (“HSBC”) under section 221 of the Companies Ordinance, Cap. 32. The summonses in each of the proceedings were issued on 2 May 2007.

2.The application arose out of an order I made on 18 January 2006 against HSBC for production of documents and oral examination under section 221 (“the HSBC Order”). I refer to my decision on 18 January 2006 (“the Decision”) for the relevant background matters and the reasons why the HSBC Order was made.

3.In this hearing, both sides seek further directions from the court to deal with various problems arising from the implementation of the HSBC Order, and its interaction with another order for production of documents that I made on 4 August 2005, which was varied by the Court of Appeal on 26 April 2006 (“the Grande Production Order”). The Grande Production Order was made against The Grande Holdings Limited (“Grande”), The Grande Group Limited, The Grande (Nominees) Limited and Omnicorp Limited (“Toyo”; previously named Tomei International (Holdings) Limited, Toyo Holdings Limited, 02 New Technology Limited and Omnitech Group Limited).  These four respondents in the Grande Production Order will be referred to collectively as “the Grande respondents”.

Paragraphs 4 to 37 (redacted)

The HSBC manuals

38.The liquidators seek production from HSBC of its internal manuals and guidelines relating to its monitoring of accounts, and the operation and conduct of its credit recovery function.  The liquidators claimed the manuals are relevant and necessary to help them understand some of the documents produced by HSBC in their proper context, the nature and purpose of the documents, the procedures and processes of HSBC in the context of the transactions and events under investigation, the application of those procedures and processes to relevant transactions and events, and some of the answers given by HSBC personnel in their examination.

39.HSBC contended that the manuals sought are not within the scope of the HSBC Order and the court has no power to order their production unless they do relate to the Companies (Re Mid East Trading Ltd., supra. at 249b).  Mr. Harry submitted that the procedures and processes of HSBC in the context of the transactions and events under investigation and the application of those procedures and processes in respect of those transactions and events cannot be said to relate to the affairs, financial condition, management, control, ownership, assets, liabilities and prospects of the Akai Group.  This was explained in some detail in paragraph 192 of the 3^rd affidavit of Mr. Ashbrooke with regard to each of the manuals sought by the liquidators.  I agree with the reasoning.

40.In any event, to address the liquidators’ concerns, HSBC has offered to answer any queries which the liquidators may have in relation to the nature or purpose of documents or classes of documents that they are unsure about.

41.I decline to order production of the HSBC manuals.

Legal professional privilege

42.The liquidators seek an order in these terms:

(1)

the Respondent do forthwith produce, supply or otherwise make available to the Applicants and the agents or representatives duly appointed by them a list of the documents being withheld from production on the grounds of legal professional privilege, detailing the date of the particular document, the author, the addressee, a brief description of its nature (without disclosing its contents) and the ground of privilege relied upon; and

(2)

leave to the Respondent to retrieve from the court the sealed box lodged with the court pursuant to paragraph 8 of the Order made on 18 January 2006 for the purpose of retrieving and producing to the Applicants the “JSM-SC Documents” as defined in paragraph 196 of the 3rd affidavit of Glenn Ashbrooke.

43.In the event that the court is not minded to order HSBC to provide a list of documents as sought in paragraph 42 (1) above, these alternative directions have been proposed by both sides:

(a)	the court should inspect and review the documents in the sealed box, after the JSM-SC Documents have been removed, and determine if HSBC is entitled to claim legal professional privilege for the remaining documents; or
(b)	HSBC should submit a list of the relevant documents to the court alone, setting out the dates, addressors and addressees, but not the nature, description or topic on which legal advice was sought, and the court is to determine the question of privilege; if the court should find it necessary to do so, the court is to inspect and review the documents.

44.In the HSBC Order, it was provided in paragraph 8 that in respect of any documents under Schedule 1 which are claimed by HSBC to be legally privileged, HSBC shall produce such documents to the court, within the times as stipulated, in a sealed box.  Pursuant to this, on 12 May 2006 HSBC lodged in court the documents for which it claimed legal professional privilege in a sealed box.  These documents comprised (a) documents passing between the solicitors retained by HSBC, Johnson Stokes & Master (“JSM”), and HSBC in relation to legal advice from JSM to the steering committee formed by a group of financial creditors of the Companies in January 2000 and led by HSBC as the liaison bank in connection with the Akai workout (these are the JSM-SC Documents referred to above); and (b) other documents that were considered by HSBC and its solicitors in these proceedings, Freshfields, to be legally privileged.  Subsequent to the filing of the sealed box, HSBC received from JSM their files relating to the Akai workout.  After review of the files, HSBC identified a number of documents which were created in connection with JSM acting for it as a creditor to the Akai Group, and claims privilege for these documents as well.

45.Other members of the steering committee authorised HSBC to provide to the liquidators all information and documentation in relation to the Akai workout.  HSBC therefore released to the liquidators all of such documents in the files it has obtained from JSM, on the basis that this does not constitute a collateral waiver of HSBC’s right to claim privilege over any related matters, and in particular without prejudice to any advice given by JSM to HSBC as a creditor, as opposed to being a member of the steering committee.  As for the sealed box that has been lodged with the court, as it contains some documents of this kind, HSBC is likewise prepared to release them to the liquidators, on the same basis as before.

46.I therefore make an order in terms of paragraph 42(2) as sought by the liquidators.  I turn to the order sought in paragraph 42(1), which is in dispute.

47.The HSBC Order made provision in paragraph 8 how legal professional privilege may be claimed, by lodging the documents in court in a sealed box.  That does not mean the parties may not ask the court to revisit the matter, as they were given liberty to apply under paragraph 12.  They may seek further or other directions from the court in this regard if it should transpire that the method prescribed of asserting a claim to privilege did not work satisfactorily, or is inappropriate, or if it is envisaged that the claim to privilege may be challenged.

48.The liquidators believed that the withheld privileged documents produced to the court by HSBC will contain information relevant to their investigations.  Even if the contents of those documents are not revealed, they believed that information such as the specific dates on which advice was given by JSM, the identity of the persons seeking, providing and receiving advice, and the topics on which advice was sought will be relevant to their investigations.  They claimed that there is no or no clear evidence that the communications over which privilege is claimed were confidential, nor is there evidence of the basis or nature of the privilege claim.  Further, as JSM acted in a dual capacity in advising HSBC and there did not appear to be any clear distinction in those capacities, the claim for privilege ought to be tested and scrutinised; the distinction between communications relevant to the steering committee and communications relating to HSBC in its individual capacity as a creditor may not always be clear on the face of the documents.  The liquidators seek a listing of the withheld documents from HSBC, to assist them with their investigations and to enable the claim for legal professional privilege to be properly tested.  They are not seeking a list in such a way as to reveal the nature, contents or subject matter of the legal advice.

49.HSBC is opposed to providing a listing of the documents that were created in connection with JSM acting for it as a creditor to the Akai Group, for which privilege is claimed.  If the liquidators are seeking a sufficiently detailed description of each of these documents to test the validity of the claim for privilege, this is an unorthodox approach.  Besides, giving a brief description of each document may well necessitate disclosing the subject matter of the legal advice, and would undermine the privilege.  I am given to understand the documents for which privilege is claimed take up two to three lever arch files.  There is no suggestion that the task of listing such documents would be unduly onerous or oppressive.  HSBC is opposed to this as a matter of principle, seeking to uphold the sanctity of legal professional privilege and the constitutional right to confidential legal advice.

50.I had made a similar order on 28 March 2007 in relation to the Grande Production Order requiring three of the Grande respondents to provide a list of documents for which they claimed legal professional privilege.  I further directed them to supply a letter from their solicitors setting out the basis on which legal professional privilege was claimed for each of the documents.  A determination was then made on 20 July 2007 in respect of those documents for which the liquidators challenged the claim to legal professional privilege.  The order was made without the benefit of any authorities cited to the court on the propriety or otherwise of ordering a list of documents where legal professional privilege is claimed.

51.I have now had the benefit of reading the relevant authorities cited by Mr. Harry and Miss Chan.  There is no binding authority on me.  Although it is recognised that a claim of legal professional privilege may be made in the context of production of documents under section 221 (Re Highgrade Traders Ltd. [1984] BCLC 151), this provision does not have a procedure to deal with a claim for such privilege.  Unlike adversarial civil litigation, there is no statutory provision as to when such a claim should be made, the manner in which it should be made, whether the claim is required to be verified on affidavit, and what information ought to be provided to the other side when the claim is made.

52.Mr. Harry submitted that the closest and best analogy to the situation of claiming privilege in the present instance is the regime prescribed in Order 24 rule 5 of the Rules of the High Court.  This provision reads as follows:

“	Form of list and affidavit (O. 24, r. 5)
	5.	(1)	A list of documents made in compliance with rule 2 or with an order under rule 3 must be in Form No. 26 in Appendix A, and must enumerate the documents in a convenient order and as shortly as possible but describing each of them or, in the case of bundles of documents of the same nature, each bundle, sufficiently to enable it to be identified.
		(2)	If it is desired to claim that any documents are privileged from production, the claim must be made in the list of documents with a sufficient statement of the grounds of the privilege.
		(3)	An affidavit made as aforesaid verifying a list of documents must be in Form No. 27 in Appendix A.”

53.The prescribed form in Form No. 26 in Appendix A makes provision for a Schedule 1 in respect of documents in the possession, custody or power of a party and it is divided into Parts 1 and 2 as follows:

“SCHEDULE 1

Part 1

(Here enumerate in a convenient order the documents (or bundles of documents, if of the same nature, such as invoices) in the possession, custody or power of the party in question which he does not object to produce, with a short description of each document or bundle sufficient to identify it.)

Part 2

(Here enumerate as aforesaid the documents in the possession, custody or power of the party in question which he objects to produce.)”

(italics supplied)

54.Miss Chan submitted that on a plain reading of Order 24 rule 5 and Form 26, no distinction would appear to be made in respect of the identification and listing of documents between documents to be disclosed without objection and those for which privilege is claimed.  I am inclined to agree.

55.That, however, is not the law, as established in a long line of English cases on the provision equivalent to our Order 24 rule 5, prior to the Civil Procedure Rules in 1998.  An accurate summary of this is given in the Hong Kong Civil Procedure 2007, Vol. 1 at para. 24/5/4:

“

But there is a certain difference between documents for which privilege from production is claimed and other documents.  As is said above, the description is not for the purpose of enabling the other party to learn the contents of the document or to test the truth of the plea of privilege.  Nor is it for the purpose of causing the party giving discovery to furnish evidence against himself (Gardner v. Irvin (1878) 4 Ex. D. 49 at 53, CA).  It is not required that the dates of the documents should be specified nor the names of the makers (ibid.). ‘Correspondence between the (defendant) and his solicitors for the purpose of obtaining legal advice’ is sufficient (ibid.).

Where privilege is claimed for professional communications of a confidential character obtained for the purpose of getting legal advice, the claim for privilege is to be treated as itself a sufficient description of the communications, irrespective of the scale of discovery or the complexity of the issues involved, and consequently the party seeking disclosure is not entitled to satisfy himself by means of fuller description of the communications for which privilege is claimed that it is not claimed for documents outside its proper scope.  Moreover the court will not order the party claiming privilege to disclose all communications with his legal advisers, or to provide fuller particulars of such communications, even where it has been shown in relation to one transaction that the advice was sought in furtherance of a fraudulent design, since to order such disclosure would be contrary to the public policy on which legal professional privilege is founded (Derby & Co. Ltd. v. Weldon (No. 7) [1990] 1 WLR 1156; [1990] 3 All E R 161).”

56.Mr. Harry has referred me to this line of English authorities: Taylor v. Batten (1878) 4 Q.B.D. 85 at 87 to 88, per Cotton LJ; Gardner v. Irvin (1878) 4 Ex. D. 49 at 53, per Cotton LJ; Ventouris v. Mountain, The Italia Express [1990] 3 All E R 157 at 160g to h, per Saville J (reversed on appeal on other grounds); Derby & Co. Ltd. v. Weldon (No. 7) [1990] 3 All E R 161 at 178h to 183b, per Vinelott J).  He has also cited relevant English textbooks on the position prior to the Civil Procedure Rules: Discovery by Mathews and Malek, 1^st ed., 1992, para. 5.09; Privilege by Colin Passmore, 1^st ed., 1998, pages 248 to 249; Phipson on Evidence, 16^th ed., 2005, para. 23-98; Documentary Evidence by Charles Hollander, 9^th ed., 2006, para. 12-27.

57.Thus, in respect of documents for which privilege is claimed, it would not be required to list them individually and it would be permissible to give a compendious description by type or category, so long as it is possible to identify them, and provided that the ground of privilege and the facts giving rise to the claim for privilege are clearly stated.  See, for example, the formulas usually adopted and as approved in Ventouris, supra. at 160g and Derby v. Weldon, supra. at 178j. The rationale behind this is that a more detailed description of the documents might be capable of undermining the privilege by revealing information (Phipson on Evidence, para. 23-98; Documentary Evidence by Charles Hollander, para. 12-27).  It is clear from the English authorities that information required to be given of the documents claimed to be privileged is not to enable the other party to test the validity of the claim.  The court would accept the list verified by affidavit as conclusive, unless it can be shown clearly that the oath of the deponent cannot be relied upon.  Apparently, the court is content to rely on solicitors, as officers of the court, that they would scrutinise documents carefully and make a correct decision in making a claim for privilege on behalf of clients in the list of documents. 

58.Mr. Harry reminded the court that legal professional privilege is a fundamental human right long established at common law, it is a necessary corollary of the right of any person to obtain skilled advice about the law, it is enshrined in Article 35 of the Basic Law, legal advice cannot be effectively obtained unless the client is able to speak unreservedly to his legal adviser in confidence, and the court must not in any way encroach on the right of a litigant or potential litigant to seek and obtain legal advice (R (Morgan Grenfell Ltd.) v. Special Commissioner of Income Tax [2003] 1 AC 563 at 606H to 607B, para. 7, per Lord Hoffmann; Ventouris v. Mountain, The Italia Express [1991] 3 All E R 472 at 476f to g, per Bingham LJ).

59.The present position under the Civil Procedure Rules is that the manner in which privileged documents are listed is identical to the manner in which non-privileged documents are listed (see Rule 31.19, the mandatory practice form N265, and Practice Direction 31), although it is noted in Documentary Evidence by Charles Hollander at para. 12-32 that the rule does not appear to have altered the practice of listing privileged documents compendiously and it is not clear how the court will react if the point is taken.

60.Miss Chan emphasised that the claim for privilege is made in the context of an investigative procedure under section 221, the court is not obliged to follow the procedure prescribed in adversarial litigation.  Rules for discovery fall to be narrowly construed in adversarial litigation, whereas the authorities on section 221 showed that it is to be given a broad and generous interpretation (Joint and Several Liquidators of Kong Wah Holdings Ltd. v. Grande Holdings Ltd. (2006) 9 HKCFAR 766 at 783B to F, para. 31, per Lord Millett NPJ). She submitted that it is open to this court to prescribe a regime, or determine what directions should be given on a case by case basis – by reference to the particular facts, the reasonable requirements of the liquidators, and the position of the party ordered to produce documents.  A blanket claim of privilege of unspecified documents based on a bald assertion would preclude scrutiny, notwithstanding that it was not properly made, and would thwart the investigation of the liquidators.

61.Miss Chan has drawn my attention to a line of authorities in Australia where the courts had adopted a less restrictive approach regarding the information to be provided in adversarial litigation, where a claim for legal professional privilege was made in the context of rules of procedure similar to our Order 24 rule 5, and the other party had applied for a more precise description of the documents in the list to make his own assessment if the claim for privilege was properly made.  The courts had ordered a party to give a supplementary list of documents identifying individually the documents over which privilege was claimed, by reference to the date, author, addressee and a brief description of the nature of the document without disclosing its contents.  This type of order, known as a “Kadlunga” order, was named after Kadlunga Proprietors v. Electricity Trust of South Australia (1985) 39 SASR 410, a decision of the Full Court of the Supreme Court of South Australia.

62.The propositions in Kadlunga, which Miss Chan has helpfully summarised, may be stated as follows:

(1)	The issue was not one of construction of the relevant rule in the Supreme Court Rules in relation to the description and identification of documents claimed to be privileged but in applying “the living spirit of the Rules rather than the dead letter” (at 413).
(2)	It is entirely proper for a party seeking discovery to challenge the ground upon which privilege is claimed for any particular document and to question whether that document as described could qualify for protection upon that ground.  Accordingly, it is both necessary and desirable that the description of a particular document for which privilege is claimed should be sufficient to disclose quite readily (without disclosing contents) whether or not it is in fact a document to which the head of privilege relied on can extend (at 414).
(3)	There is a middle ground between the disclosure of the contents of a protected document and consequential loss of privilege on the one hand, and the adequate description of the nature of the document for which privilege is claimed.  It is impossible to discern whether the limits of privilege have been observed without some useful description of the nature of the document.  Whilst it must be accepted that the description of a document is conclusive and cannot be challenged by the opposing party, this is only on the basis that the description is truly adequate.  If this was not so, the claim to privilege could not begin to be meaningfully tested (at 415).
(4)	It is a common occurrence that bona fide mistakes have been made by practitioners as to the scope of privilege and its applicability to particular documents.  Reliance on the judgment and integrity of practitioners is not an adequate safeguard or a substitute for adequate description (at 415).
(5)	What is required in properly describing discovered documents will vary from case to case depending on the nature of the document and the particular ground of privilege claimed (at 415).

63.Kadlunga had been approved and widely applied in Australia, including in the following cases cited by Miss Chan: JN Taylor Holdings Ltd v. Bond (1991) 57 SASR 21 (Debelle J and, on appeal, the Full Court of the Supreme Court of South Australia); Bradley Phillips Pty. Ltd. v Burn Brite Lights (Vic) Pty. Ltd. [2002] SASC 145 (Supreme Court of South Australia Civil, Master Burley); Boase v. Seven Network (Operations) Ltd. [2005] WASC 174 (Supreme Court of Western Australia, Master Newnes).

64.Mr. Harry has also drawn my attention to two other cases in Australia to show that Kadlunga was not uniformly followed: Lazenby v. Zammit (1987) Tas R 54 (Full Court of the Supreme Court of Tasmania); Stephen David Kenny v. Territory Insurance Office [1994] NTSC 26 (Supreme Court of the Northern Territory of Australia, Master Coulehan).

65.I note these propositions in the subsequent cases which applied Kadlunga:

(1)	There are sound reasons to require a party to describe more adequately the documents the subject of a claim for privilege.  It will be an unusual case where the description of the documents will betray the line of reasoning of a party’s legal adviser (JN Taylor Holdings Ltd v. Bond, supra. at 36, per Debelle J).
(2)	What underlies the reasoning in Kadlunga is the fact that errors can be made, either through negligence or inadvertence, and the need to describe each document reduces the incidence of error.  Furthermore, the requirement to examine each document for the purpose of description will focus the solicitor’s mind closely upon the issue and will assist in determining whether in fact the claim for privilege should be made or maintained (Southern Equities v. Arthur Andersen, 11 December 2000, Debelle J, unreported, quoted in Bradley Phillips Pty. Ltd. v Burn Brite Lights (Vic) Pty. Ltd., supra. at para. [21]).
(3)	Where a claim of privilege is made, the facts relied upon as giving rise to the privilege must be set out so the claim can be tested, although the facts should not be set out in such detail as would enable the contents of the documents to be ascertained indirectly.  An adequate description is required of each of the document for which privilege is claimed, but not one which indirectly reveals its contents (Boase v. Seven Network (Operations) Ltd., supra. at para. [24]).
(4)	It is not appropriate, as has been laid down on many occasions, for a claim for privilege to be made simply en globo and by reference to classes of documents.  The appropriate method of describing privileged documents is to enumerate them, that is to list them, and then to identify the bases upon which the privilege is claimed (Halliday v. ACN  003 075 394 Pty Ltd, 11 April 1994, Supreme Court of Victoria Appeal Division, unreported, quoted in Boase v. Seven Network (Operations) Ltd., supra. at para. [25]).
(5)	“Rolled up” claims of privilege are confusing and inappropriate.  Where more than one ground of privilege is relied upon, the specific ground or grounds relied upon for each document must be related to that document, and it is not sufficient to state a number of grounds without specifying which of them relate to which document (Boase v. Seven Network (Operations) Ltd., supra. at paras. [26] and [30]).

66.As for the two Australian cases cited by Mr. Harry, Green CJ and Wright J in their joint judgment in Lazenby v. Zammit, supra. at para. 4 expressed the view that the proposition in Kadlunga had put an “unauthorised gloss” on the plain language of Order 33 rule 16(1) of the Rules of the Supreme Court, and the correct limits of the rule were as stated by the English Court of Appeal in Taylor v. Batten, supra. Nevertheless, the appeal was allowed in that the respondent was ordered to deliver to the appellant a further list of documents claimed to be privileged describing each of them sufficiently to enable it to be identified.  As for Stephen David Kenny v. Territory Insurance Office, the Master merely mentioned Kadlunga and Lazenby v. Zammit and stated that there may be a division of opinion as to the extent to which privileged documents must be described in a list of documents and did not analyse the authorities.

67.Miss Chan also referred me to two other Australian cases dealing with a claim for legal professional privilege in the context of production of documents under section 596B of the Corporations Act, which is an investigative procedure similar to our section 221: Re Southland Coal Pty Ltd (2006) 58 ACSR 113 (Supreme Court of New South Wales, Equity Division, Austin J); and Re Moage Ltd, Shehan v. Pitterino (1998) 26 ACSR 726 (Federal Court of Australia, Mansfield J). In the latter case, the court had given directions that the producing party should provide a schedule of documents for which legal professional privilege was claimed, the liquidator was then to respond, and the producing party should provide a schedule of the disputed documents to which the claim for privilege was maintained.  Further directions were given in the judgment for the producing party to establish its claim to privilege in a proper manner on affidavit, including a list of the documents for which privilege was claimed.

68.I set out the relevant passages in these judgments:

“	[80]	… As I have explained, the person to whom the order is directed may object to producing the document and once the objection is made, cannot be compelled to do so unless and until the objection is overruled.  That is the position as a matter of law.  If orders were made expressly excluding documents subject to client legal privilege, there would be a risk that the persons to whom the orders were directed would regard themselves as exonerated from taking any co-operative steps with respect to documents they regard as privileged, such as preparing lists or even embarking on any process of review.  At least in some cases, it may be preferable simply to add a note to the orders drawing the reader’s attention to the relevant rules.  But in my view it is unnecessary to take any such step in a fully contested inter partes matter where the parties are legally represented, and I do not regard the Court of Appeal as suggesting otherwise.  In such a case an acceptable course, in accordance with the rules, is to make unqualified orders for production coupled with liberty to apply, which may be exercised for the purpose of giving directions designed to bring forward contested privilege claims for resolution, once specific documents have been identified and particular claims for privilege have been made in respect of those identified documents.
	[82]	The courts have not yet devised a wholly satisfactory procedure for resolving privilege claims where large quantities of documents are involved.  It may be that no single procedure fits every case.  But there are some general discretionary considerations to be borne in mind in considering, on an inter partes basis, whether to embark upon any process.  They include the justification for imposing onerous obligations on the producing party.  It is necessary to weigh up the effort, expense and disadvantage to be borne by the party against whom orders are sought (that is, the effort, expense and other disadvantage involved in identifying and preparing a large quantity of documents for production and assessing whether privilege should be claimed in respect of particular documents) against the prejudice that would be suffered by the party requiring production if the order were refused (in terms of thwarting the exercise of that party’s statutory powers for the benefit of creditors or others whose interests have been recognised by the legislature). …”
	(Re Southland Coal Pty Ltd, supra.)
“	Where a claim for privilege is disputed, the determination of the claim will depend upon the facts established in evidence, including the circumstances in which the document came into existence … I propose to reserve to [the liquidator] the right to require of [the producing party] evidence by affidavit in proper form of the basis for the claim to privilege which it asserts in respect of any documents which, by my ruling on the motion to the extent I determine it, are not to be made available to [the liquidator]. (at 730)
	As foreshadowed, because there is no affidavit foundation presently laid for the claim to legal professional privilege claimed in those documents, or any detailed list of them, I will permit [the liquidator] to require such affidavit evidence to be provided [by the producing party] and I will permit [the liquidator] to give written notice that a list of those documents be filed and served so that [the liquidator] may consider and, if thought fit, challenge the claim for legal professional privilege.” (at 739)
	(Re Moage Ltd, Shehan v. Pitterino, supra.)

69.It would appear from the above that the Australian courts had ordered a detailed list of documents to be provided with affidavit evidence laying the foundation for a claim of privilege in the context of an investigative procedure equivalent to our section 221.

70.I am not persuaded by Mr. Harry that to require a list of the privileged documents with the information sought by the liquidators would undermine or destroy the privilege claimed.  The line of cases adopting Kadlunga have demonstrated there could be a middle ground in requiring an adequate description of the privileged documents to enable the other side to assess the propriety of the claim that stopped short of a disclosure, directly or indirectly, of the contents of the document.  In seeking a “brief description of its nature” in this instance, the liquidators are not seeking a description of the nature of the advice sought or given, but merely the nature of the document.

71.The direction sought by the liquidators of requiring a list of the privileged documents would seem to me a sensible interim measure, giving sufficient information to the liquidators to determine whether they should challenge the claim for privilege in respect of any document.  The matter could then come back to the court for determination of the claim for privilege of any disputed document.

72.I will give the direction sought by the liquidators in terms of paragraph 42(1) as set out above.

Other orders

73.Other directions and orders sought by the liquidators as per their revised draft order are not controversial.  These relate to “Reasonable endeavours”, “Retention of documents”, “Return of documents”, “Costs” and “ Liberty to apply”.  I will make an order in terms as sought.

Miss Linda Chan, instructed by Messrs Laracy Gall, for the Applicant

Mr Timothy Harry, instructed by Messrs Freshfields Bruckhaus Deringer, for the Respondent