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File Notes: Part 3

The NSW Supreme Court recently reviewed the ownership of file notes in the matter of Alexiou v Alexandra White & Ors t/as HWL Ebsworth Lawyers [2021] NSWSC 485. In that matter, an employee of the ANZ bank received an examination summons from ASIC in relation to an investigation. The employee retained HWL Ebsworth (HWLE) to assist with the response to that examination and ANZ agreed to pay the costs. ASIC then brought proceedings against the ANZ but no findings were made against the employee however his employment was terminated and he commenced Federal Court proceedings in relation to that termination. During the course of the Federal Court proceedings, the former employee requested that HWLE release its file to the new solicitor. HWLE complied except they retained bills of costs and file notes. This was challenged by the client who sent a summons seeking orders that the documents be handed over.

HWLE gave evidence that the file notes had not been prepared for the benefit of the client and that no charge was made for their creation. Unfortunately that evidence was not given by the solicitor who did the work. The court took a dim view of that and suggested that it would have been straightforward for the solicitor who did the work to give evidence.  They would have been able to identify the purpose of the file note. Without that evidence, the court was not convinced that the sole purpose of preparing the file notes was to protect the solicitor.

It was also inferred that a file note prepared in relation to attendance at a meeting was likely to be part of the time recorded for that meeting. As such, the client would have been charged for the work and therefore that would be enough to make the file note the property of the client.

As a matter of general principle, unless it is absolutely clear that the only purpose of the file note is to protect the solicitor or for its own benefit or records, and it can be clearly established that no charge has been passed onto the client, then a court is likely to determine that file notes are the property of the client and should be handed over as soon as practicable when requested to do so in accordance with Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 Regulation 14.1.

Liability limited by a scheme approved under Professional Standards Legislation

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