Bradford v Devlot 17 Pty Ltd
[2020] VSC 246
•7 May 2020
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST
S ECI 2018 01134
| VICKI ADELE BRADFORD and JONATHAN ALAN UPHILL | Plaintiffs/Defendants by Counterclaim |
| v | |
| DEVLOT 17 PTY LTD (ACN 126 265 790) | Defendant/Plaintiff by Counterclaim |
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JUDGE: | Matthews JR |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 20 February 2020, further written submissions on 28 February, 11 and 12 March 2020 |
DATE OF RULING: | 7 May 2020 |
CASE MAY BE CITED AS: | Bradford & Anor v Devlot 17 Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2020] VSC 246 |
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PRACTICE AND PROCEDURE – Objection to subpoena – Legal professional privilege – Issue waiver – Evidence Act 2008 (Vic), ss 118, 119 – Application of earlier ruling to specific documents.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr D Lorbeer | Aitken Partners |
| For the Defendant | Mr P B Murdoch QC, with Mr P H Wallis | Clayton Utz |
TABLE OF CONTENTS
Introduction........................................................................................................................................ 1
Background......................................................................................................................................... 3
Relevant information about the proceding............................................................................... 3
Documents sought pursuant to the Subpoenas........................................................................ 5
Objections to the Subpoenas........................................................................................................ 6
Aitkens Subpoena................................................................................................................ 6
Apteds Subpoena................................................................................................................. 7
Previous hearing regarding the Subpoenas and ruling regarding issue waiver................. 8
The hearing on 20 February 2020.............................................................................................. 12
Description of the content of the Aitkens Table..................................................................... 14
Matters/issues to be determined in this decision.................................................................. 14
Applicable principles...................................................................................................................... 15
Applicability of the Evidence Act............................................................................................... 17
The Court’s inspection of disputed documents...................................................................... 17
The parties’ submissions in respect of the scope of waiver.................................................... 18
Plaintiffs’ submissions................................................................................................................ 18
Scope of issue waiver........................................................................................................ 18
Associative waiver............................................................................................................. 20
Defendant’s submissions........................................................................................................... 20
Scope of issue waiver........................................................................................................ 20
Associative waiver............................................................................................................. 22
Plaintiffs’ submissions in reply................................................................................................. 23
Consideration.................................................................................................................................... 24
General comments regarding application of Issue Waiver Ruling..................................... 24
General consideration regarding associative waiver............................................................. 27
Application of Issue Waiver Ruling to particular documents.............................................. 28
Conclusion......................................................................................................................................... 29
SCHEDULE 1...................................................................................................................................... 1
JUDICIAL REGISTRAR:
Introduction
This decision concerns an objection by the Plaintiffs to inspection of certain documents produced by Aitken Partners Pty Ltd trading as Aitken Partners (‘Aitkens’) pursuant to a subpoena issued on 21 January 2020 by the Defendant (‘Aitkens Subpoena’). Aitkens are the solicitors for the Plaintiffs in this proceeding.
Of relevance is another subpoena issued on the same date by the Defendant, addressed to Elizabeth Susan Apted trading as Apteds Lawyers (‘Apteds’) (‘Apteds Subpoena’; with the Aitkens Subpoena, the ‘Subpoenas’). Apteds Lawyers were the previous solicitors for the Plaintiffs in relation to the transactions and dealings which are the subject matter of this proceeding.
The matter for decision here is whether certain documents produced by Aitkens and over which the Plaintiffs make a claim for legal professional privilege are able to be inspected by the Defendant as a consequence of that privilege having been waived. This is explained in further detail below, however it is sufficient at this point to note that at a hearing on 11 February 2020 in relation to the objections to the Subpoenas, I made rulings, ex tempore, in respect of waiver of privilege, holding that privilege had been waived in three respects. The hearing on 20 February 2020 concerned whether that waiver applied to particular documents, which had been enumerated in a list prepared by the Plaintiffs. That hearing also concerned similar submissions in relation to some of the documents produced pursuant to the Apteds Subpoena, however that process has not concluded and rulings on particular documents under the Apteds Subpoena will be dealt with separately and after my decision regarding the Aitkens documents has been given.
The Plaintiffs rely on the following affidavits:
(a) xChloe Ashley Taylor, sworn 17 February 2020 (‘First Taylor Affidavit’). Ms Taylor is a solicitor employed by Aitkens;
(b) Elizabeth Susan Apted, sworn 18 February 2020 (‘First Apted Affidavit’). Ms Apted is a principal of Apteds;
(c) Vicki Adele Bradford, the first plaintiff, sworn 19 February 2020 (‘Bradford Affidavit’);
(d) Ms Taylor, sworn 19 February 2020 (‘Second Taylor Affidavit’);
(e) Ms Apted, sworn 20 February 2020 (‘Second Apted Affidavit’); and
(f) Robert Andrew Bradley, sworn 20 February 2020 (‘Bradley Affidavit’). Mr Bradley is a principal of Aitkens.
The Defendant relies on three affidavits of Christine Zoe Demiris, a solicitor employed by Clayton Utz (solicitors for the Defendant), sworn:
(a) 7 February 2020 (‘First Demiris Affidavit’);
(b) 18 February 2020 (‘Second Demiris Affidavit’); and
(c) 20 February 2020 (‘Third Demiris Affidavit’).
Written submissions were also received, as follows, from:
(a) The Defendant, filed 10 February 2020;
(b) The Plaintiffs, filed 20 February 2020;
(c) The Defendant, filed 28 February 2020;
(d) The Plaintiffs, filed 11 March 2020; and
(e) The Defendant, filed 12 March 2020.
Background
Relevant information about the proceding
This proceeding concerns a dispute between the Plaintiffs and the Defendant arising out of dealings between them in respect of the sale of a sizeable portion of land in Mount Duneed (‘Land’) by the Plaintiffs to the Defendant. Some background is necessary in order to understand matters concerning the waiver of privilege.
The parties entered into a contract of sale in September 2008 for the sale of the Land by the Plaintiffs to the Defendant (‘Original Sale Contract’). Settlement of the Original Sale Contract occurred in July 2015 and the Defendant became the registered proprietor of the Land in August 2015. It was envisaged that the Defendant would subdivide the Land. The Original Sale Contract contained a special condition, condition 13, which gave the Plaintiffs an option to buy back part of the Land, being a portion marked ‘B’ on an annexed plan and measuring approximately 10,775 sq m for $319,200 (‘SC 13’). SC 13 envisaged the Defendant obtaining a certified plan of subdivision and giving the Plaintiffs notice to exercise the option, with the parties then to execute a contract in the form annexed to the Original Sale Contract if the option to purchase that parcel of land (‘Option Parcel’) was exercised.
SC 13 provided that the dimensions and area of the boundaries of the Option Parcel may vary and gave the Plaintiffs the option to buy back a reduced area of land and specified the price per hectare of such a reduced area.
The Plaintiffs say that they validly exercised the option contained in SC 13 on or about 23 August 2013 by letter of that date from their solicitor to the Defendant’s solicitor enclosing a contract executed by them in the form annexed to the Original Sale Contract. The land described in this document as the land being purchased was the Option Parcel. A counterpart of this document executed by the Defendant was provided to the Plaintiffs on or about 11 April 2014 (‘Option Contract’).
The Original Sale Contract was varied by a written variation agreement on 15 January 2014 (‘Variation Agreement’). The Plaintiffs allege that by the Variation Agreement:
·the Defendant acknowledged that the Plaintiffs had validly exercised the option;
·it was recorded that a plan of subdivision “was being prepared”, and reference was made to an attached plan of subdivision numbered PS 718771T in June 2013 on which the Option Parcel was shown as lot 2;
·it was agreed that settlement under the Option Contract was to occur 14 days after notification of registration of the plan of subdivision; and
·it was agreed that the Defendant was responsible for “all things to effect registration”.
The relevant local authority had issued a planning permit for a staged multi-lot development in April 2013, of which the Land formed a part. A plan of subdivision was endorsed by the local authority on 31 August 2016 which showed several proposed lots (one of 4,334 sq m (‘House Lot’) and the others smaller) (together, ‘Subject Lots’) which the Plaintiffs say together broadly corresponded to the Option Parcel.
In the proceeding, the Plaintiffs seek specific performance of the Option Contract, contending that they are entitled to have the Subject Lots transferred to them upon payment of the sum contained in the contract, being $319,200.
It is not necessary for the purposes of this decision to traverse the various arguments made by the parties about the enforceability of SC 13 and the Option Contract.
The Defendant contends that when signing the Original Sale Contract, the parties knew that the creation of the Option Parcel may not be possible as it may not be approved by the local authority. The Defendant says that in mid-late 2013 it submitted a proposed plan of subdivision which showed the Option Parcel as one lot of a two-lot subdivision but this was not approved by the local authority.
Relevantly, the Defendant contends that the Plaintiffs are not entitled to specific performance of the Option Contract as there was a concluded agreement reached on 13 April 2015 that the option land would be the House Lot (‘Alleged Revised Option’). In the course of the hearing before me on 11 February 2020, this was interchangeably referred to by the parties as a concluded agreement or an election by the Plaintiffs to purchase only the House Lot. I note that the Defendant pleaded in its amended defence and counterclaim dated 2 April 2019 that there had been an election by the Plaintiffs in or about 13 April 2015 to 16 April 2015 to reduce the land to be purchased by them to the Alleged Revised Option, whereas in its further amended defence and counterclaim dated 31 July 2019 that election was deleted and was referred to as an agreement. I further note that while these terms of ‘election’ and ‘agreement’ were used interchangeably by both parties at the hearing, they are obviously quite different legal concepts. More about this will be said later.
It appears to be common ground that Apteds acted for the Plaintiffs in respect of the transactions the subject of this proceeding up to around April 2015 and that Aitkens commenced acting for the Plaintiffs in that regard from around April 2015, although Ms Apted was copied into some correspondence after that time.
Documents sought pursuant to the Subpoenas
By the Aitkens Subpoena, the Defendant sought production of the following documents:
1.The file or files maintained by [Aitkens] in respect of their acting for [the Plaintiffs] in relation to the [Property] during the period 1 January 2015 to 17 November 2016.
2.To the extent not covered by 1 above, all documents comprising, evidencing or recording any communication during the period 1 January 2015 to 17 November 2016, relating to [the Plaintiffs] in relation to the [Property] between Robert Bradley (and/or any other person for or on behalf of [Aitkens]) and:
(a) [the Plaintiffs];
(b)Elizabeth Apted and/or any other person for or on behalf of [Apteds];
(c)Matthew Gorman and/or any other person for or on behalf of Big Picture Urban Rural;
(d) City of Greater Geelong;
(e)Rowan Mobbs and/or any other person for or on behalf of Walsh Mobbs Land Surveyors;
(f) Gregory Bell; and/or
(g) any other person.
By the Apteds Subpoena, the Defendant sought production of similar categories of documents, as follows:
1.The file or files maintained by [Apteds] in respect of their acting for [the Plaintiffs] in relation to the [Property] during the period 1 January 2013 to 17 November 2016.
2.To the extent not covered by 1 above, all documents comprising, evidencing or recording any communication during the period 1 January 2013 to 17 November 2016, relating to [the Plaintiffs] in relation to the [Property] between Elizabeth Susan Apted (and/or any other person for or on behalf of [Apteds]) and:
(a) [the Plaintiffs];
(b)Robert Bradley and/or any other person for or on behalf of [Aitkens];
(c)Matthew Gorman and/or any other person for or on behalf of Big Picture Urban Rural;
(d) City of Greater Geelong;
(e)Rowan Mobbs and/or any other person for or on behalf of Walsh Mobbs Land Surveyors;
(f) Gregory Bell; and/or
(g) any other person.
Objections to the Subpoenas
Aitkens Subpoena
By letter dated 30 January 2020 to the Prothonotary, Aitkens informed the Court that the Plaintiffs objected to producing the documents sought in categories 1, 2(a), (b), (f) and (g) of the Aitkens Supboena. The Plaintiffs did not object to production of the documents sought in paragraphs 2(c), (d) and (e) of the Aitkens Subpoena.
Category 2(g) of the Aitkens Subpoena was objected to on the grounds that the scope for this request was too wide.
The other categories of the Aitkens Subpoena to which objections were taken were on the grounds of the documents being subject to client legal privilege pursuant to s 118 of the Evidence Act 2008 (Vic) (‘Evidence Act’).
Aitkens produced to the Prothonotary a USB stick containing copies of the documents over which the Plaintiffs claimed privilege and a bundle of hard copy documents over which there was no objection. Aitkens also advised, by the same letter, that copies of the documents which had not been objected to had been provided to the Defendant’s solicitors.
The objections to the Aitkens Subpoena were therefore made by the Plaintiffs, not by Aitkens as the person subject to the subpoena.
Apteds Subpoena
By letter dated 29 January 2020 to the Prothonotary, Aitkens informed the Court that the Plaintiffs objected to the documents produced pursuant to the Apteds Subpoena being inspected by the Defendant due to a claim for client legal privilege pursuant to s 118 of the Evidence Act. Aitkens requested to inspect the documents first, so as to identify the documents subject to a privilege claim, before they were released to the Defendant for inspection.
By letter dated 30 January 2020 to the Prothonotary, Apteds informed the Court that the Plaintiffs objected to producing the documents sought in categories 1, 2(a), (b), (f) and (g) of the Apteds Supboena. The Plaintiffs did not object to production of the documents sought in paragraphs 2(c), (d) and (e) of the Apteds Subpoena. The grounds for the objections were the same as those stated by Aitkens in respect of the Aitkens Subpoena.
When producing the documents to the Court, Apteds separated them into two boxes: one containing the documents subject to a claim for privilege; the other to which no privilege claim was asserted by Apteds on behalf of the Plaintiffs.
Both the Aitkens letter and the Apteds letter made objections on behalf of the Plaintiffs (albeit slightly inconsistently). The objections set out in the Apteds letter were not made as the person the subject of the Apteds Subpoena.
Previous hearing regarding the Subpoenas and ruling regarding issue waiver
Relevantly, the hearing on 11 February 2020 (‘First Hearing’) was to deal with the Plaintiffs’ objections to the Subpoenas. The context of that hearing is important: at that time, the trial of the proceeding was due to commence on 18 February 2020 and therefore the objections to the Subpoenas needed to be dealt with as expeditiously as possible. By the time of the First Hearing, the Plaintiffs’ primary objection to the Subpoenas was that of legal professional privilege.
At the First Hearing, the Defendant’s primary submission was that the evidence adduced to that date did not establish the Plaintiffs’ privilege claim in the first place. In my view, which I expressed at the time, the Plaintiffs’ evidence was deficient and did not establish the privilege claim. However, I acceded to the Plaintiffs’ request for time to adduce further evidence.
The Defendant also argued at the First Hearing that if the documents were privileged, then that privilege had been waived.
The Defendant contended that the Plaintiffs had waived privilege in the documents produced pursuant to the Subpoenas, all drawn from the files maintained by Apteds and/or Aitkens, based on statements made in a witness statement dated 15 January 2020 by Robert Bradley filed and served by the Plaintiffs in advance of the trial (‘Bradley Statement’). There were three paragraphs in the Bradley Statement which the Defendant relied upon in this respect. They were as follows:
5.At no stage did my initial instructions from the Plaintiffs, or indeed Ms Apted, indicate that there was a concluded agreement made on or about 13 April 2015 between the Plaintiffs and the Defendant for the Plaintiffs to accept a reduced area of land in full settlement of their entitlements. Rather
(a)the Plaintiffs thought there may have been an agreement reached at a ‘without prejudice’ meeting in December 2014 but when the parties endeavoured to produce documents to record such an agreement it became apparent that there was no agreement, and
(b)the Plaintiffs were prepared to consider a lesser area in April 2015 as part of a package including a number of other components such as a lease of adjacent areas, a sale of the remaining option land and confidence that the plan as discussed would be approved – however it seemed like approval was not obtainable …
…
14.Consistent with the Plaintiffs’ instructions I sent a draft Variation document by email to Robertson Hyetts [the solicitors who had acted for the Defendant in respect of the subject transactions] on 17 June 2015. …
…
22.I formed the opinion that the information provided by Mr Kearns did not reflect an accurate statement of the additional value to the Plaintiffs of what was being offered because:
(a)it included costs that the Defendant was already obliged to bear; and
(b)omitted the value of additional benefits being offered such as the lease of neighbouring paddocks.
I forwarded the spreadsheet email to my clients on 25 September 2015, advising of these concerns and seeking instructions. The Plaintiffs instructed me not to discuss any compromise until the endorsed plans were amended.
I took the view that the question of waiver could be determined at the First Hearing, and that this should be done in the interests of expediting an outcome in respect of the objections to the Subpoenas in light of the imminent trial date. The application of this ruling to the documents would be part of a process that I then established, as I will shortly explain.
I then heard submissions in respect of waiver of privilege. In respect of paragraph 5 of the Bradley Statement, the Plaintiffs conceded that there had been a waiver of privilege in respect of the initial instructions given to Mr Bradley, whereas the Defendant contended that the waiver was broader than that. There was no appreciable difference between the parties in respect of waiver regarding paragraphs 14 and 22 of the Bradley Statement: as will be seen below, the Plaintiffs conceded waiver in that regard and the scope of that waiver was not disputed by the Defendant.
I then made the following ruling at the First Hearing, given ex tempore, as recorded in the transcript (‘Issue Waiver Ruling’):
To the extent that there is a submission that the entirety of the Apted or Aitken files are the subject of waiver, and I do not apprehend that that was the submission by the end of Mr Murdoch's submissions, I do not accept that submission. The plaintiffs have conceded that there has been a waiver in respect of the plaintiffs' initial instructions to Aitkens regarding whether there was a concluded agreement made on or about 13 April 2015 between the plaintiffs and the defendants for the plaintiffs to accept a reduced area of land in full settlement of their entitlements. This has been described in submissions as making either a concluded agreement or an election to accept a smaller parcel of land.
The plaintiffs also concede that there has been a waiver of any initial instructions given by Ms Apted to Aitkens in respect of that same issue, and there was a further concession during the course of argument that that would include any parts of the Apted file sent to Aitkens at that time that go to that issue of whether an election to accept the smaller parcel had been made.
In respect of paragraph 14 of the Bradley witness statement the plaintiffs concede that privilege has been waived in respect of the instructions to prepare and send the document that is referred to there which is a draft variation document sent to - I take it Robertson Hyetts are the defendants' previous solicitors - on 17 June 2015, and then in respect of paragraph 22 of the Bradley witness statement the plaintiffs concede that there has been a waiver in respect of the plaintiffs' instructions not to discuss any compromise until the endorsed plans were amended. There were no submissions made about this, and I will hear further from the parties if it is needed. I take it that this is around the time of 25 September 2015, but that may need to be further clarified.
The defendants say that the waiver is not as narrow as that. They say that the waiver extends to not just the documents or the communications, but the issue. They say that once there is an area where an issue has been raised then every document before there was a waiver becomes open to scrutiny. They rely on the authorities which refer to this as being a matter of fairness in the sense of the plaintiff being selective about which instructions it wants to use for its benefit. They say that documents which touch upon the issue have been waived because of the plaintiffs’ selective use.
In my view privilege has been waived in respect of the issue of whether there was a concluded agreement made on or about 13 April 2015 to accept a smaller parcel of land, and in respect of any election by the plaintiffs to accept a smaller parcel of land. I express it in those terms because submissions were made about the plaintiffs' election more about the concluded agreement, and to the extent that there is a difference between a concluded agreement and an election my view is that the waiver is in respect of both, and so that any documents over which privilege is claimed after a proper review is made of the documents to see whether they are privileged then that privilege has been waived in respect of that issue.
Therefore it follows that I accept the defendants' submission that the waiver is in respect of that issue and not just in respect of documents recording initial instructions.
In respect of the other two areas then my view is, and there was no submission made in opposition to the plaintiffs' contentions about waiver in respect of paragraphs 14 and 22 of the Bradley witness statement, so that privilege has been waived in respect of the instructions to prepare and send the draft variation document that is referred to in paragraph 14. Can I indicate that I do not expect a narrow approach to be taken to that as in it is only a document which says, yes, please send it over which privilege has been waived, but it is documents going to the preparation in sending of that document.
At the conclusion of the First Hearing, relevantly I made the following orders in respect of the Plaintiffs’ privilege claim, both in general terms and in respect of the documents produced on inspection to which objection was taken on the grounds of privilege, which orders were to be carried out in light of the Issue Waiver Ruling (‘Orders’):
(a) For inspection of documents produced by Apteds over which privilege was not claimed (the Defendant already having been given copies of the documents produced by Aitkens which were not the subject of a privilege claim);
(b) The Plaintiffs to file and serve any further material on which they rely to substantiate a claim of legal professional privilege, the basis for it and the evidence for it, by 12.00pm on 13 February. This is to include a list of the documents and information referred to in this order, along with an indication of whether the Plaintiffs say privilege has been waived and the basis for that;
(c) By 12.00pm on 13 February, the Plaintiffs are to produce to the Defendant for inspection copies of the documents over which privilege is no longer claimed or over which privilege has been waived;
(d) By 12.00pm on 14 February, the Defendant is to file and serve any material in response to the Plaintiffs’ material, which is to include an identification of any documents over which the privilege claim or waiver is disputed, setting out the reasons why;
(e) By 5.00pm on 14 February, the parties were to confer and advise my Associate which documents remain in dispute and provide any further submissions; and
(f) The further hearing of the objections to the Subpoenas was adjourned to 12.00pm on 17 February.
During the course of discussing this regime with Counsel at the First Hearing, it was envisaged that the list referred to in paragraph (b) above would be prepared as a table, with the Defendant then being able to add columns to that table for its response. It was also envisaged that to the extent possible, a ruling would be given at the hearing scheduled for 17 February 2020. This was so that the position regarding the documents could be determined prior to the trial commencing on 18 February.
Subsequent to the First Hearing, the timetable set out in the Orders was twice varied by consent and the hearing was re-scheduled for 20 February. On 14 February, the parties had been advised by one of the Court’s listing coordinators that the trial fixed for 18 February had been vacated.
The hearing on 20 February 2020
By the time of the adjourned hearing of the objections to the Subpoenas on 20 February 2020 (‘Second Hearing’), both parties had filed and served further affidavits and there were two tables which listed the documents over which privilege had initially been claimed. These tables had been prepared by the Plaintiffs and contributed to by the Defendant, one for the documents produced pursuant to the Aitkens Subpoena (‘Aitkens Table’) and the other for the documents produced pursuant to the Apteds Subpoena (‘Apteds Table’).
Both tables followed the same format, as set out below:
Doc No. Date of doc Description of doc Privileged? If so, grounds? If privileged, waived? Defendant’s comments 1 2
The Plaintiffs also filed and served a written outline of submissions shortly before the Second Hearing.
By the time of the Second Hearing, it was readily apparent that the position in respect of the Apteds documents was not complete and that further work needed to be done by the parties, particularly the Plaintiffs, in respect of those documents before the Court could be in a position to sensibly make rulings regarding them.
It was also readily apparent that the Court was not in a position to deliver a ruling that day in respect of the Aitkens documents, as a large number of them remained in dispute, the resolution of which would necessitate the Court inspecting the documents. In addition, the parties disagreed as to the scope of the waiver: effectively, they disagreed as to the interpretation or application of the Issue Waiver Ruling.
Therefore, I heard submissions from the parties before reserving any decision regarding the Aitkens documents, with the Apteds documents to be dealt with after that decision had been made. I also made orders for the Defendant to provide a written outline in response to the Plaintiffs’ written outline of that day, which was also to address matters regarding associative waiver, and for the Plaintiffs to respond to that.
At the Second Hearing, the Defendant no longer contended that the Plaintiffs had not adduced sufficient evidence to substantiate their privilege claims, rather, the remaining dispute was in respect of waiver of privilege. So much is apparent from the Defendant’s comments on the tables, where it was stated that the Defendant accepted the privilege claims but disputed non-waiver where that was asserted.
Description of the content of the Aitkens Table
It is necessary at this juncture to briefly describe the content of the completed Aitkens Table.
In general terms:
(a) Where the Plaintiffs have stated that the document is not privileged, the Defendant has accepted that position;
(b) Where the Plaintiffs have stated that privilege over a document has been waived, the Defendant has accepted that position;
(c) Where the Plaintiffs have stated that the document is privileged and that privilege has not been waived, the Defendant has not accepted that position, its response largely being as set out below. This response first arises in respect of item 9, which is described as an email from the Plaintiffs dated 11 May 2015 to Aitkens ‘enclosing Plaintiffs’ letter described in item 7 above providing comments as to our letter and seeking legal advice’. I shall describe this response as the Item 9 Response:
The defendant accepts the privilege claim but disputes the non-waiver of privilege claim because the description of the contents of the document suggests that it either bears directly on the issue of election or is the subject of associative waiver, particularly in circumstances where the plaintiffs concede that privilege in respect of documents 3-7 has been waived.
Matters/issues to be determined in this decision
The following matters fall to be determined in this decision:
(a) The application of the Issue Waiver Ruling to the documents where waiver is disputed in the Aitkens Table; and
(b) Whether privilege over the whole of the Aitkens file as produced pursuant to the Aitkens Subpoena has been waived as a result of ‘associative waiver’.
The following matters are not dealt with in this decision and may need to be determined separately if not resolved by this decision:
(a) The application of the Issue Waiver Ruling to the Apteds documents;
(b) Whether the Plaintiffs can ‘claw back’ specified documents which have been produced to the Defendant over which a claim to privilege is maintained;
(c) Whether privilege over the whole of the Apteds file as produced pursuant to the Apteds Subpoena has been waived as a result of ‘associative waiver’; and
(d) Whether ‘associative waiver’ applies in respect of particular documents (as opposed to whether it generally applies).
In general terms, I have not set out the parties’ submissions or evidence in respect of issue waiver which led up to the Issue Waiver Ruling: that ruling has been made and there is no utility in re-hashing those matters.
Applicable principles
The parties’ submissions as to privilege were all predicated on the Evidence Act applying. The privilege claims made by the Plaintiffs are made pursuant to ss 118 or 119 or both of the Evidence Act.
Section 118 of the Evidence Act deals with legal professional privilege under what is referred to as the ‘legal advice’ limb in the common law principles regarding privilege, and provides as follows:
Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of—
(a)a confidential communication made between the client and a lawyer; or
(b)a confidential communication made between 2 or more lawyers acting for the client; or
(c)the contents of a confidential document (whether delivered or not) prepared by the client, lawyer or another person—
for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client.
Section 119 of the Evidence Act deals with legal professional privilege under what is referred to as the ‘litigation’ limb in the common law principles regarding privilege, and provides as follows:
Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of—
(a)a confidential communication between the client and another person, or between a lawyer acting for the client and another person, that was made; or
(b)the contents of a confidential document (whether delivered or not) that was prepared—
for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding (including the proceeding before the court), or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party.
Section 122(2) of the Evidence Act relevantly provides that, apart from certain exceptions, the adducing of evidence is not prevented if the client or party concerned has acted in a way that is inconsistent with the client or party objecting to the adducing of the evidence because it would result in a disclosure of a kind referred to in sections 118 or 119 of the Evidence Act. This encompasses the common law principles in respect of issue waiver.
Section 126 of the Evidence Act is also relevant to the matters under consideration here. That section is as follows:
126 Loss of client legal privilege—related communications and documents
If, because of the application of section 121, 122, 123, 124 or 125, this Division does not prevent the adducing of evidence of a communication or the contents of a document, those sections do not prevent the adducing of evidence of another communication or document if it is reasonably necessary to enable a proper understanding of the communication or document.
This encompasses the common law principles in respect of associative waiver.
Applicability of the Evidence Act
Section 131A of the Evidence Act relevantly provides that ss 118 and 119 only apply in preliminary proceedings where (a) a person is required to produce documents pursuant to subpoena; and (b) the person objects to providing that document.[1]
[1]Emphasis added.
In both Subpoenas, the persons objecting to production of the documents are the Plaintiffs, not the persons who are required to produce them, being Aitkens and Apteds respectively. Accordingly, it is the common law principles in respect of legal professional privilege which apply, not the provisions of the Evidence Act.[2]
[2]Cargill Aust Ltd & Ors v Viterra Malt Pty Ltd & Ors (No 8) [2018] VSC 193, [42]; Alphington Developments Pty Ltd v Amcor Limited (No 2) [2018] VSC 293, [22]-[27].
This issue was identified by me in the preparation of these reasons and was raised with the parties after the Second Hearing via email from my Associate. The parties were asked to confirm whether it made any material difference to the earlier submissions as to privilege and as to waiver, in the context where I had already given a ruling in respect of waiver and where my preliminary view was that the application of the common law principles as opposed to the Evidence Act would not make any difference to the result. The parties agreed with this and were content for me to take their existing submissions and consider them as if they had been made by reference to the common law.
The Court’s inspection of disputed documents
At both common law and under the Evidence Act, the Court has a discretion to inspect the disputed documents, provided that the party claiming privilege has adduced enough evidence for the claim first to be entertained.[3] Since the prima facie claim in respect of privilege has now been accepted by the Defendant, which I observe is a proper concession to have been made in light of the affidavits filed by the Plaintiffs after the First Hearing, it is appropriate for the Court to inspect the documents in this case, as I consider it necessary to do so.
[3]AWB Limited v Honourable Terence Rhoderic Hudson Cole (No 5) [2006] FCA 1234; Asahi Holdings (Australia) Pty Ltd v Pacific Equity Partners Pty Limited (No 4) [2014] FCA 796; Evidence Act, s 133; Tabcorp Holdings Ltd v State of Victoria [2013] VSC 302, [97].
In carrying out this inspection, I have inspected not just the documents which remain in dispute after the preparation of the Aitkens Table, but also some of those listed in the Aitkens Table which are no longer the subject of any dispute. I considered it necessary to do so, in order to understand how the Issue Waiver Ruling was applied by the Plaintiffs in preparing their portions of the Aitkens Table, as well as to give context to the application by me of the Issue Waiver Ruling and to determine questions of associative waiver.
The parties’ submissions in respect of the scope of waiver
While I have read and considered all submissions made by the parties and taken them into account in reaching my decision, I do not consider it necessary to summarise all of those submissions in these reasons. Many of the submissions went beyond what was relevant to the matters before me, which I consider to be much narrower than the matters which the parties’ submissions canvassed. Rather, I have summarised those submissions which I consider to be relevant and pertinent to the matters before me.
Plaintiffs’ submissions
The Plaintiffs relevantly submit that the issues at the Second Hearing were:
(a) the scope of the waivers the Court found to have occurred, in particular the waiver arising from paragraph 5 of the Bradley Statement; and
(b) whether privilege in any further materials had been waived by operation of s 126 of the Evidence Act (i.e., associative waiver).
Scope of issue waiver
The Plaintiffs say that the Defendant’s conception of the scope of the waiver is unduly broad and does not reflect the Issue Waiver Ruling. They say that the waiver found by the Court arising from paragraph 5 of the Bradley Statement was in respect of the issue of whether there was a concluded agreement made on or about 13 April 2015 between the Plaintiffs and the Defendant for the Plaintiffs to accept a smaller parcel of land, or whether the plaintiffs had made an election on or about that date to do so, and that the waiver was not just in respect of documents recording initial instructions to Aitkens.
The Plaintiffs submit that the effect of the Issue Waiver Ruing is that privilege in documents recording or evidencing an account of discussions which took place on 13 April 2015 between the Plaintiffs and the Defendant has been waived, including documents recording or evidencing instructions given by the Plaintiffs to their lawyers containing such an account. Therefore, documents created on or after 13 April 2015 in which privilege would otherwise inhere may fall within the scope of the waiver. Otherwise, documents created prior to 13 April 2015 do not fall within the scope of the waiver, subject to the application of s 126 of the Evidence Act. They say that self-evidently, documents created before that date cannot record or evidence discussions which took place on that date.
The Plaintiffs say that the Defendant seeks to rely upon the statement of their Senior Counsel at the First Hearing that:
although we would like to say to our learned friends that will be recorded on the transcript is that from our perspective no later than December 2014, and this is spoken of in the outline – the witness statement of Mr Costello – from no later than December 2014 there were meetings of the parties where the plot of the smaller portion that we say was the subject of the election was pegged out at a meeting between the parties, and so we say that really from December 2014 onwards the events point to the election, and that’s what our learned friends ought to bear in mind.[4]
[4]Transcript of 11 February 2020 hearing, 52.21-53.1.
The Plaintiffs submit that this is a statement of position by the Defendant which does not reflect the terms of the Issue Waiver Ruling. They say it purports to extend the scope of the waiver beyond the terms of the Issue Waiver Ruling, which expresses the waiver that was found to have occurred by reference to the date 13 April 2015.
The Plaintiffs go on to submit that to the extent that it is submitted that the issue of ‘election’ somehow extends the scope of the waiver beyond accounts of communications between the Plaintiffs and the Defendant:
(a) Essential to the making of an election is communication to the party affected, by words or conduct, of the choice thereby made.[5] It follows that any instructions by the Plaintiffs to their lawyers about their subjective wishes are, without more, irrelevant to the question whether the Plaintiffs had ‘elected’, privileged and, unless in some way recording or evidencing communications between the parties on 13 April 2015, not the subject of a waiver;
(b) Otherwise, merely putting a state of mind into issue will not, of itself, give rise to waiver of privilege in respect of legal advice that is relevant to the existence of that state of mind.[6]
[5]In this regard, the Plaintiffs rely on Sargent v ASL Developments Ltd (1974) 131 CLR 634, 655-656.
[6]In this regard, the Plaintiffs rely on Commissioner of Taxation v Rio Tinto Ltd (2006) 151 FCR 341, [65].
Associative waiver
The Plaintiffs say that the Defendant has not identified any documents over which privilege has been found (or, I interpolate, conceded) to be waived for which it is ‘reasonably necessary to enable a proper understanding of the [waived] communication or document’ to have regard to another document. They say that the Defendant has not sought to adduce evidence in support of what the Plaintiffs describe as the assertive statement of conclusion in the Defendant’s repetitive responses in the Aitkens Table to the contrary. Further, the Plaintiffs say that the Defendant has not identified which specific document in the list over which privilege is claimed is reasonably necessary for a proper understanding of which specific document in the list falls within the scope of the waivers.
Defendant’s submissions
Scope of issue waiver
The Defendant submits that the use of the word ‘elects’ in SC 13 has its plain English meaning, namely ‘chooses’ or ‘decides’. It does not have a technical legal meaning as understood in a contract law context, typically in cases involving an election to terminate an agreement, as was the situation in the authority relied upon by the Plaintiffs. Rather, the Defendant says, SC 13 involves a unilateral decision by the Plaintiffs to purchase an area of land smaller than the Option Parcel, in substitution for the Option Parcel, which does not require the agreement of the Defendant. The Defendant’s written outline dated 28 February 2020 then goes on to set out, in some detail, the conduct relied upon by it to say that the Plaintiffs’ choice to accept a reduced area of land, which events are said to encompass a period from 20 December 2014 to 17 April 2015.
The Defendant submits that the waiver lays open to scrutiny privileged material which discloses:
(a) the Plaintiffs’ state of mind in respect of the ‘issue’ (i.e. subject matter) of whether there was a concluded agreement/election or whether any steps had been taken or were to be taken to advance a concluded agreement/election;
(b) the Plaintiffs’ instructions to Ms Apted and Mr Bradley in respect of the ‘issue’ (i.e. subject matter) of whether there was a concluded agreement/election or whether any steps had been taken or were to be taken to advance a concluded agreement/election; and
(c) Ms Apted’s and Mr Bradley’s advice to the Plaintiffs in respect of the ‘issue’ (i.e. subject matter) of whether there was a concluded agreement/election or whether any steps had been taken or were to be taken to advance a concluded agreement/election.
The Defendant says that this is the logical effect of what the Issue Waiver Ruling was.
The Defendant also submits that the guiding subject matter for the Issue Waiver Ruling is:
(a) ‘a concluded agreement made on or about 13 April 2015 to accept a smaller parcel of land’; - reflecting the Plaintiffs’ submissions; and/or
(b) ‘any election by the Plaintiffs to accept a smaller parcel of land’ – reflecting the Defendant’s submissions, without any temporal limitation.
The Defendant then says that there is likely to be no practical difference between the two formulations, both capturing documents which would enable the Defendant to test the propositions advanced in paragraph 5 of the Bradley Statement.
The Defendant points to an email chain dated 17–18 May 2015 (‘May 2015 Email’)[7] which has been produced by the Plaintiffs to the Defendant, although it is a document over which the Plaintiffs maintain their privilege claim. Without setting out the contents of the May 2015 Email here, the Defendant says that it contains statements which constitute or disclose a relevant state of mind, advice and instructions, as referred to above.
[7]Being Item 48 in the Aitkens Table and exhibits CZD-2 and CZD-6 to the First Demiris Affidavit.
Associative waiver
The Defendant submits that by operation of s 126 of the Evidence Act, to the extent necessary, the Defendant is entitled to material which is ‘reasonably necessary’ to enable it to gain a proper understanding of other communications or documents.
The Defendant cites Sackville J in Towney v Minister for Land & Water Conservation (NSW) as follows:[8]
… if one party discloses a privileged document or communication, in circumstances that make the disclosure misleading unless associated privileged material is also disclosed, it would be difficult to dispute that disclosure of the associated material is ‘reasonably necessary to enable a proper understanding of’ the document already disclosed. In applying the standard specified by s 126 of the Evidence Act, it is to be borne in mind that the expression ‘proper understanding’ is by no means narrow. The dictionary definition of ‘proper’ includes ‘complete or thorough’; the definition of ‘understand’ includes ‘to apprehend clearly the character or nature of’ and ‘to grasp the significance, implications or importance of’ (Macquarie Dictionary). It may or may not be correct to say that the test stated in s 126 of the Evidence Act is, or appears to be, narrower than the principles governing implied waiver under the general law: cf Cross on Evidence (Aust ed), para 25300. Any precise assessment of the scope of s 126 must await further decisions. However, I think it fair to say that, if a privileged document is voluntarily disclosed for forensic purposes, and a thorough apprehension or appreciation of the character, significance or implications of that document requires disclosure of source documents, otherwise protected by client legal privilege, ordinarily the test laid down by s 126 of the Evidence Act will be satisfied.
[8](1997) 76 FCR 401, 413-4 (‘Towney’).
The Defendant says that the totality of the Aitkens’ file has been waived insofar as it concerns state of mind, instructions or advice of the type referred to above. It says that unless the subject matter of the communication on the file is wholly separate from this subject matter, disclosure of the communication is reasonably necessary to enable a proper understanding of the communications that have been produced. It is said that the description of the documents in the Aitkens Table indicates that the communications are not wholly separate from the relevant subject matter.
Plaintiffs’ submissions in reply
In reply, the Plaintiffs reject the Defendant’s submissions as to the meaning of ‘election’. They say that when SC 13 is viewed in its entirety, the option is to be exercised by the Plaintiffs giving written notice to the Defendant. This means that while SC 13 may involve a unilateral decision by the Plaintiffs, that decision must, under the express terms of the Original Sale Contract, be communicated to the Defendant by written notice. Therefore, say the Plaintiffs, at trial a question will be whether there was some relevant communication from the Plaintiffs to the Defendant giving rise to the election. In response to this, the Defendant says that the ‘election’ in SC 13 is not an act by which the option conferred by that provision is to be exercised, but rather is a mechanism to enable the Plaintiffs to reduce the size of the land which might be the subject of the option, which would then be capable of being exercised in accordance with the procedure set out in SC 13 (that is, by the giving of written notice, amongst other things).
The Plaintiffs submit that ‘election’ without a temporal limitation was not part of the Issue Waiver Ruling. They say that the ‘issue’ which has been waived is whether there was a concluded agreement/election made on or about 13 April 2015.
Further, the Plaintiffs say that the Defendant’s submission about their state of mind in respect of the issue is too broadly stated and too vague to be of utility, and is based on what they describe as the Defendant’s erroneous conception of ‘election’. They say that if it includes the Plaintiffs’ intention or wishes, it is not relevant unless it was communicated to the Defendant. They concede that their states of mind insofar as it comprises opinions/conclusions about whether there was a concluded agreement/election made on or about 13 April 2015 as communicated to their lawyers fall within the scope of the Issue Waiver Ruling. The Plaintiffs also reject the Defendant’s submission that the waiver includes Ms Apted’s or Mr Bradley’s advice in respect of whether there was a concluded agreement/election or any steps had been taken or were to be taken to advance a concluded agreement/election.
In respect of the May 2015 Email, the Plaintiffs state that they formally maintain their claim of privilege and that it does not contain an account of a discussion that took place between the parties on or about 13 April 2015 and does not otherwise address whether there was a concluded agreement between the parties or an election by the Plaintiffs on or about that date. They say that the May 2015 Email does not fall within the scope of the waiver found to have occurred.
Consideration
General comments regarding application of Issue Waiver Ruling
At the outset, it is important to note that the Issue Waiver Ruling has already been made and that the purpose of the Second Hearing and this decision is to deal with the application of that ruling to the documents which remain in dispute. This is not an opportunity for the parties to re-open the Issue Waiver Ruling.
Further, in carrying out the task before me, it is not appropriate for me to sit in appeal from my own ruling.[9]
[9]Senior Counsel for the Defendant made this submission at the Second Hearing, which I accept: Transcript of 20 February 2020 hearing, 41.18-42.11.
The Plaintiffs’ submission at the First Hearing was that the waiver applied only to their (and Ms Apted’s) initial instructions to Mr Bradley. The Defendant’s submission was that the waiver went beyond the initial instructions and to the issue of whether there had been a concluded agreement reached on or about 13 April 2015. The Defendant’s submission was accepted in this regard.
The scope of the waiver is primarily informed by the act which constitutes the waiver. The waiver which I found to have occurred, and as expressed in the Issue Waiver Ruling, arises as a result of paragraph 5 of the Bradley Statement. It does not arise as a consequence of the pleadings, as amended or not. Nor does it arise as a consequence of an interpretation of the Original Sale Contract and SC 13. Those matters therefore do not inform the scope of the waiver.
As a result of paragraph 5 of the Bradley Statement, the Plaintiffs have waived privilege over documents in respect of the issue of whether there was a concluded agreement made on or about 13 April 2015 between the Plaintiffs and the Defendant for the Plaintiffs to accept a reduced area of land in full settlement of their entitlements. As I expressed in the Issue Waiver Ruling, during the course of submissions the parties had, in an interchangeable way, referred to ‘concluded agreement’ and ‘election’. Early in my ruling I noted that “this has been described in submissions as making either a concluded agreement or an election to accept a smaller parcel of land”.[10] It was because of these distinct legal concepts being used interchangeably during submissions that the waiver was expressed by me in the Issue Waiver Ruling as concerning a concluded agreement or an election. This was to ensure that a distinction between the two concepts was not used as a basis to conclude, when reviewing particular documents, that privilege had been waived in respect of that document.
[10]Transcript of 20 February 2020 hearing, 47.14-47.16.
I do not accept the Defendant’s submission that privilege has been waived over any election by the Plaintiffs to accept a smaller parcel of land without any temporal limitation. It is clear, from the whole of the Issue Waiver Ruling, that the waiver was over documents in respect of the issue of whether there was a concluded agreement or an election made on or about 13 April 2015 between the Plaintiffs and the Defendant for the Plaintiffs to accept a reduced area of land in full settlement of their entitlements. Since the terms were used interchangeably in the submissions, and since the waiver arises from paragraph 5 of the Bradley Statement, the inclusion of ‘or an election’ is as an alternative to a concluded agreement made on or about the date recited. There is a temporal element or limitation to ‘an election’ as a consequence. I recognise that the Issue Waiver Ruling does refer to ‘any election’, but when viewed as a whole, it is tolerably clear that it is to be read and applied in the manner I have set out.
Since the waiver was not restricted to the initial instructions given to Mr Bradley, I stated during the course of the First Hearing that the documents over which privilege had been waived was not restricted to the timeframe of the initial instructions being given to Mr Bradley. Rather, documents which go to whether there was a concluded agreement/election on or about 13 April 2015 were the subject of the waiver, irrespective of when they were created. Plainly, that may include documents prior to that date if they go to the concluded agreement/election. By way of hypothetical example, this would include an email from the Plaintiffs to their solicitor on 11 April 2015 that said ‘the Defendant has asked if we will accept this reduced area’ if it was followed by an email on or about 13 April 2015 from the Plaintiffs to their solicitor where they said ‘we replied to the Defendant and said’ yes or no, as the case may be.
It follows that in this context, ‘election’ is not merely a choice or decision without more. In this instance, for it to be an election it had to have been communicated in some way to the Plaintiffs. However, I do not consider that for the purposes of the applying the Issue Waiver Ruling, the ‘election’ had to have been exercised in the manner said to be set out in SC 13 and I reject the Plaintiffs’ submission in that regard.
I do not accept the Defendant’s submissions about state of mind, instructions and advice in the way that they were put. The Plaintiffs’ subjective wants or desires, as opposed to their subjective understanding as to whether there was a concluded agreement or election made on or about 13 April 2015, do not fall within the scope of the waiver. I do not consider that paragraph 5 of the Bradley Statement puts the Plaintiffs’ state of mind in issue in the broad sense advanced by the Defendant. Similarly, the Plaintiffs’ instructions to Mr Bradley (whether directly or through Ms Apted), as to what they would like or wanted, do not fall within the scope of the waiver. Whether or not the legal advice given to the Plaintiffs as a consequence of the instructions falls within the waiver will depend on the content of the advice, taking the matters just referred to into account.
In respect of the May 2015 Email, I do not consider it appropriate to go into a detailed analysis of its content, as the Plaintiffs maintain their claim to privilege over it, and that document may be the subject of further argument about any ability to claw it back. In light of what I have said about the scope of the waiver, I do not consider that the passages referred to in the Defendant’s outline[11] are such as to give rise to a waiver of privilege.
[11]Defendant’s outline, 28 February 2020, [23].
General consideration regarding associative waiver
I do not accept the Defendant’s submissions in respect of associative waiver. In particular, I do not accept that privilege has been waived over the whole of the Aitkens file in the manner contended for by the Defendant. It is not the case that, without reviewing the documents, it can be said that disclosure of the whole of the file is reasonably necessary to enable a proper understanding of the communications which have been produced.
Rather, the principles set out in Towney, as referred to above, are to be applied by reference to particular documents. In respect of each of the documents which have been produced (whether because privilege is not claimed or because waiver has been found/conceded), are there specific other documents which are required to be disclosed in order to enable a proper understanding of the produced documents? It is right, for example, to point to the description of Item 9 in the Aitkens Table to say that associative waiver may arise due to the waiver of privilege over Items 3-7, as the Defendant does. However, whether Item 9 is required to be produced as a consequence of the waiver over Items 3-7 will depend on an inspection of both Items 3-7 and (possibly) Item 9, rather than the way in which it is described in the table.
It follows, therefore, that I do not accept the formulaic application of the Item 9 Response which has been used by the Defendant throughout the Aitkens Table where it objects to the Plaintiffs’ categorisation of items as privileged and not waived.
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