Production orders: the problem with ‘concern’ and ‘for the benefit of’

In Giraud v Albarran (liquidator), in the matter of Digital Infrastructure Pty Ltd (in liq) [2021] FCA 1274; (2021) 156 ACSR 236, the Court reviewed, de novo, a registrar’s orders for production of documents in aid of a public examination. The decision is notable for how the Court treated two phrases commonly used to describe categories of documents.

The registrar's order required production of all documents which “record, evidence or concern” any advice “given to, or for the benefit of,” the company or its directors (at [70]).

‘Concern’

Derrington J held that documents which “record” or “evidence” advice should be self-evident, as they would generally be the primary documents by which the advice was given (at [72]). By contrast, the word “concern” was uncertain and vague. To comply, a solicitor would need to read every piece of correspondence and every court document and form a judgment as to whether it met the description, which could make compliance unduly onerous (at [72]). The liquidators accepted that the word should be removed, and the Court agreed (at [73]).

‘For the benefit of’

The applicants submitted that advice “for the benefit of” the company would capture advice given to the directors personally if it incidentally benefited the company. The Court accepted there was force in that submission (at [74]).

The liquidators proposed the alternative wording “for the benefit of the Company via its directors” (at [76]). However, the Court accepted the applicants’ submission that the phrase would still require an uncertain, subjective inquiry into whether the company benefited from particular advice (at [77]). The order was instead framed as advice “given to the Company either directly or by its directors, and whether solely to the Company or otherwise” (at [77]). That formulation preserved the directors’ ability to claim privilege over advice given to them and the company jointly, with any such claim to be determined later (at [75], [77]).

The Court also held that where a substantial number of documents are likely to be claimed as privileged, the preferable course is for the solicitors to identify them by affidavit rather than produce them, leaving the liquidators to challenge any claim (at [53]-[54]).

When drafting orders for production, and the recipient may search a large file, categories should be tied to documents which record or evidence the relevant matter, and the recipient of any advice should be identified objectively. Open-textured words such as “concern” or “for the benefit of” risk successful objection.