Uber appeal fails to prove misconduct exception

_{< Go back to Class Actions Landscape Australia}

This decision arose from the appeal and cross-appeals brought from the decision of Matthews AsJ in Andrianakis v Uber Technologies Inc & Ors [2022] VSC 196 (Primary Decision) regarding legal professional privilege (LPP). Her Honour found that the misconduct exception in s 125 of the Evidence Act 2008 (Vic) (Misconduct Exception) applied and that the defendants (Uber) could not claim LPP in relation to legal advice after “regarding aspects of the operation of UberX such as launching and continuing to provide UberX using unlicensed drivers, avoiding enforcement activity or detection, and dealing with fines and prosecutions and UberX Partners about those, including supporting UberX Partners”, as the legal advice was found to be “in furtherance of” the commission of offences (General Finding) (Primary Decision at [287] and [290]).

Uber appealed the Primary Decision on six grounds, four of which related to the General Finding:

1. Her Honour had erred in making the General Finding.
2. Her Honour had erred in finding that the plaintiff had satisfied the evidentiary onus for the Misconduct Exception, as it was argued, the Misconduct Exception required specific consideration of the particular document and specific offences.
3. By reason of grounds 1 and 2, her Honour had erred in finding that the Misconduct Exception applied to the sample documents used to resolve the privilege dispute (Uber having claimed LPP over 12,000 documents, and a sampling process was agreed between the parties to resolve the dispute).
4. In the alternative to grounds 1-3, if the General Finding was correct, her Honour erred in applying it to the sample documents.

The plaintiff cross-appealed the Primary Decision on the following bases:

1. Her Honour erred in finding that, for the purposes of the Misconduct Exception, a document was only prepared “in furtherance of” an offence if there existed a ‘combination’ of the defendants’ ‘knowledge of illegality’ and ‘a clear intention to launch UberX regardless’ (Primary Decision at [285]).
2. By reason of ground 1, her Honour erred in finding the Misconduct Exception did not apply to documents before the relevant dates.
3. In the alternative to grounds 1 & 2, the combination of ‘knowledge of illegality’ and ‘a clear intention to launch UberX regardless’ existed prior to the relevant dates.

A central theme throughout Uber’s submissions was that the General Finding was “expressed with such generality that its application left significant room for doubt as to which documents were caught…” (at [58]). Shortly before the appeal hearing, Uber introduced de novo an argument that the privilege dispute regarding the Misconduct Exception ought to be resolved by reference to 7 categories of documents, which Uber argued, remained privileged and demonstrated that her Honour had fallen into error. Uber did not raise this approach before her Honour and did not include it in its written submissions on the appeal. The plaintiff did not agree to the approach.

Neither did Justice John Dixon, with his Honour stating (at [132]-[133]):

[132]    … I reject Uber’s submission that the General Finding, her Honour’s reasons and the schedule thereto cannot be sensibly applied to the remaining documents, such that the issue of Uber’s claims to legal privilege can be fully and properly determined.

[133]    I do not foresee that a judicial officer or a special referee would experience difficulty in applying the primary judge’s ruling on the sample documents in the context of her full reasons to the remaining documents, if Uber were to maintain, as it has on this appeal, that it is unable to do so itself. Were Uber to maintain this position, I would be inclined, subject to any further submission, to exercise power under s 48(1) of the Civil Procedure Act 2010 (Vic) to implement a process for independent assessment of the remaining documents.

Findings on Uber’s Appeal

His Honour rejected Uber’s appeal. In relation to the general principles regarding the Misconduct Exception, his Honour held (at [137]):

Section 125 of the Act does not require the identification of specific offences or how relevant communications were in furtherance of those specific offences. The text of s 125, having regard to its context within the framework of the Act and the broader legislative purpose, neither makes nor implies any such requirement

His Honour continued (at [138]):

Parliament clearly intended that s 125 would capture a broad range of circumstances in which a document or communication is not merely relevant to the misconduct but in some way advances it, either directly or indirectly. Two aspects of the exception may be emphasised in this case.

(a)    Whether a document or communication is ‘in furtherance’ of misconduct is ultimately a question of fact to be determined in the context of each case. In particular, a document or communication may be ‘in furtherance’ of misconduct even if the document or communication is not a ‘step’ in the commission of an offence, or directly connected to carrying out an element of the fraud or crime

(b)    In the context of systemic misconduct, it is sufficient for the purposes of s 125 that the document or communication was ‘in furtherance of’ that systemic misconduct more generally. It is not necessary to establish a direct link between the document or communication and a specific instance of the offending or fraudulent conduct.

In relation to the standard of proof required, his Honour held (at [141) that “[w]hat is required is more than a bald allegation that an offence has been committed or other improper conduct has occurred or was intended to occur.” His Honour further held that “[t]he existence of reasonable grounds was not in dispute because it was plainly alleged, and a proper basis for such allegations readily appeared from discovery…”.

His Honour also dismissed Uber’s arguments that it was necessary for her Honour to identify specific instances of offending for the Misconduct Exception to apply, holding (at [142] and [147]) that it was unnecessary for specific instances of offending (and particular documents in relation to those specific offences) to be identified. His Honour accepted the submissions of the plaintiff that the words “in furtherance of” in s 125 were not to be interpreted narrowly or prescriptively. His Honour held (at [143]):

Whether a document meets that statutory description such that client legal privilege is inapplicable in respect of it, is fact sensitive. It is erroneous to apply a policy overlay, drawn at a high and abstract level, that a narrow or prescriptive interpretation is required by the sacrosanct status of the right to consult a lawyer in private as a component of the proper administration of justice, when no warrant for that narrow or prescriptive interpretation can be identified in the text of the section, its context and the purpose of the Act.

In summarising the general principle underpinning the Misconduct Exception, his Honour stated (at [150]):

Legal advice for the purposes of maintaining, promoting, concealing, or in any way giving continuing efficacy to misconduct is distinguishable from legal advice about the consequences of past conduct, including in that category advice about the future consequences of that past conduct in terms of remedy that might be available to victims of such misconduct or legal defences or strategies that may be available to the perpetrator should the victim make a claim against it. Such advice would not be in furtherance of the commission of the misconduct because ‘furtherance’ is to be given its ordinary meaning, which is ‘the fact of being helped forward; the action of helping forward; advancement, aid, assistance’. The precise nature of systemic misconduct and advice in furtherance of it remains a factual inquiry.

At [152], his Honour concluded that “… whether legal advice was in furtherance of misconduct requires close attention to the allegations made in the pleading subject to being satisfied that there is a proper basis, a foundation in fact to be proved at trial, that will give colour to the charge”.

Findings on the Cross-Appeal

His Honour rejected grounds 1 and 2 of the cross-appeal but upheld ground 3, holding (at [174]):

I am persuaded that there are reasonable grounds for finding that a communication was made or document prepared in furtherance of an offence, when Uber clearly intended to launch UberX, regardless of whether such advice was in furtherance of the Ridesharing Offences from earlier dates than were identified by the process adopted by the primary judge… I accept, after review of the relevant documents, that the primary judge ought to have found that the Relevant Dates are the earlier dates… I considered that the question was whether there was a clear intention rather than, as Uber contended, a final decision to launch UberX.

Andrianakis v Uber Technologies Inc & Ors (Appeal) [2022] VSC 643

Supreme Court of Victoria, John Dixon J,
28 October 2022

Plaintiff’s Solicitors: Maurice Blackburn
Defendants’ Solicitors: Herbert Smith Freehills
Plaintiff’s Funder: Harbour

Austlii Link: Available here

_{< Go back to Class Actions Landscape Australia}