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Commercial firm locked in legal battle over allegations of a ‘malicious’ letter

A national commercial law firm was under fire from property company Modscape and its director who have alleged that a letter sent by a partner to the Victorian Building Authority contained “false and malicious” words that led to him suffering a loss.

user iconNaomi Neilson 18 May 2021 SME Law
legal battle
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Registered building practitioner Stefan Seketa has pursued a lawsuit against Gadens and partner Andrew Denehy over a letter sent on behalf of its client C&L International Holdings to the Victorian Building Authority that set out Mr Seketa was “no longer a fit and proper person” to continue practising within his profession. 

Mr Seketa told the court that the words contained in the letter were sent within days of his company being placed into administration and without the defendants making any inquiries about his finances and before administrators reported to creditors. 

“In the premises, Gadens and Mr Denehy published the said words on behalf of C&L knowing they were false or reckless, not caring whether they were true or false in order to persuade the Victorian Building Authority to suspend the plaintiff’s registration as a registered building practitioner so as to deny him the ability to earn an income in his chosen profession because C&L was unable to recover a debt owed by the company,” Mr Seketa submitted to the Supreme Court. 

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Mr Seketa was pursuing the lawsuit on the grounds that he suffered loss and damage by reason of having to incur professional fees and disbursements to rebut the allegations that were made in the letter. The most recent hearing has questioned whether C&L’s pleadings are inconsistent with the maintenance of confidentiality.

Mr Seketa maintained that the particulars show inevitably that C&L’s lawyers must have been integrally involved and, from the description of some of the documents, that Gadens and Mr Denehy had provided advice material to the formulation of C&L’s state of mind. He said it was inevitable that C&L received the advice and assistance of its lawyers, “given it’s the lawyers that sent the letter”. 

However, the court agreed with C&L submissions that privilege in communication will only be waived where the privilege holder makes an assertion, or brings a case, which is either about the contents or an otherwise privileged communication or which necessarily lays open confidential communication to privilege. 

“In my view, nothing in C&L’s pleading has put any legal advice relating to the content of the letter in issue or laid it open to scrutiny,” the court found. 

“For these reasons, there is no inconsistency between the assertions in the particulars and the maintenance of privilege. The plaintiff has not made out the claim for waiver of privilege in respect of the C&L documents and it is unnecessary to consider the arguments concerning the documents that post-date the letter.” 

Mr Seketa’s application has been dismissed.

The entire judgement can be read on AustLII: Seketa v Gadens Lawyers & Ors [2021] VSC 245 (12 May 2021).

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