Citicorp Australia Ltd & Ors v Cirillo & Anor No. Scgrg-85-1481 Judgment No. S417

CITICORP AUSTRALIA LIMITED & ORS V CIRILLO AND ANOR

[1999] SASC 417

JUDGE BURLEY. By application dated 31 August 1999 the plaintiffs seek the following order:-
“1..... That within such time as the Court may order, the first defendant and his solicitor deliver up to the solicitors for the plaintiffs all copies in his and their custody, possession or power of the unmasked letter of Mr John Heard and Mr Stephen Young to Mr Graeme Lawrie, Citicorp Australia Limited, dated 26 May 1988, being exhibit ‘RMM1’ to the affidavit of the defendant’s solicitor sworn 16 August 1999 and filed herein, together with all copies of that letter in the possession of any third person to whom the first defendant or his solicitor has provided a copy.”
In addition, the plaintiffs seek orders requiring the defendant and his solicitor to file and serve an affidavit relating to the copying of the letter, the dissemination of copies and the passing on of information contained in the letter. Paragraph 3 of the application seeks injunctive relief restraining the first defendant and his solicitor from using and further disclosing allegedly privileged and confidential information contained in the letter.
It is not in dispute that the Court has the power to make the orders sought: Rouse & Ors v IOOF Australia Trustees, an unreported decision of Lander J [1999] SASC 127; Hongkong Bank of Australia Ltd v Murphy & Ors [1993] 2 VR 419.
The following affidavits were admitted on the application:
Mr Marsden sworn on 31 August 1999, filed by the plaintiffs’ solicitors (Doc 169).
Mr Marrone sworn on 9 September 1999, filed by the first defendant’s solicitor (Doc 173).
Mr Jucha sworn on 16 September 1999, filed by the plaintiffs’ solicitors (Doc 175).
Mr King sworn on 16 September 1999, filed by the plaintiffs’ solicitors (Doc 176).
Mr Marrone sworn on 21 September 1999, filed by the first defendant’s solicitor (except for paragraph 3 thereof).
In the course of prosecuting this action the plaintiffs obtained an interlocutory injunction on 24 May 1985 which prevented the first defendant from disposing or dealing with a piece of earthmoving equipment which has been referred to during argument as “the Poclain”. The plaintiffs gave the usual undertaking as to damages before being granted the injunction. On 4 February 1993 the plaintiffs discontinued this action against the first defendant but the first defendant has sought damages from the plaintiffs pursuant to the undertaking as to damages. The plaintiffs have given discovery in respect of the first defendant’s claim for damages and during the course of inspection of the plaintiffs’ discovered documents, Mr Marrone, the solicitor for the first defendant, requested and obtained from the plaintiffs’ solicitors the letter referred to in paragraph 1 of the application (the letter). The plaintiffs claim that the letter contains a communication which is protected by legal professional privilege and they seek to recover from the first defendant and his solicitor the unmasked copy of the letter given by the plaintiffs’ solicitors to the first defendant’s solicitor during the course of inspection and any copies of the letter made by the first defendant and his solicitor.
The letter was sent by Mr Heard and Mr Young, the third and fourth plaintiffs to the first plaintiff. Mr Heard and Mr Young were at the time the receivers and managers of the second plaintiff, CW Construction Pty Ltd. They had been appointed by the first plaintiff pursuant to a security document. The relevant parts of the letter (excluding the parts in respect of which privilege has been claimed) is as follows:-
“Mr. G.A. Lawrie,
Manager,
Citicorp Australia Limited,
GPO Box 764G
MELBOURNE VIC. 3001
Dear Sir,

C.W. Construction Pty. Ltd.
(Receivers & Managers Appointed)
(In Liquidation)
Reference is made to our discussions concerning the affairs of the abovenamed company wherein you have instructed us to discontinue all legal actions forthwith.
We have awaited the outcome of certain third party litigation which impinged on this receivership (refered [sic] to below) and have sought to meet with Mr. Cirillo, the company’s Managing Director to resolve all issues.
We therefore provide the following updated details of each legal action and our recommendations concerning same.”

There then follows two sections headed respectively “Poclain Excavator - Mr V Cirillo” and “Heytrack (Australia) Pty Ltd”. The letter continues:-
“....... Mr. V. Cirillo - Other Matters
The Corporate Affairs Commission in South Australia instituted a criminal action against Mr. Cirillo alledging [sic] false pretences involving the double financing of the Poclain Excavators. Unfortunatelly [sic] that action was unsuccessful.
Australian Guarantee Corporation Ltd. also contacted us some time ago threatening to institute proceedings against Mr. Cirillo. We have contacted them again however they are not prepared to advise us of the current position in their negotiations with Mr. Cirillo’s advisers.
......... Neil Marine Pty. Ltd.
David Neil’s company Neil Marine Pty. Ltd. was placed in Liquidation on July 13, 1987. The principal asset available to the Liquidator is an interest in a dredge situated at Port Augusta and on which is mounted an excavator owned by Australian Guarantee Corporation Ltd. To date the Liquidator has been unsuccessful in selling the dredge and in any event Australian Guarantee Corporation Ltd. is registered as a first debenture holder and would rank prior to our claim.
C.W. Construction Pty. Ltd.’s debenture over Neil Marine Pty. Ltd. is still registered at the Corporate Affairs Commission however we did agree during the negotiations with Mr. Neil to discharge the debenture in return for the cancellation of your security guarantee by the Electricity Trust of South Australia.
It is unlikely that any funds will become available from Neil Marine Pty. Ltd.
......... Receipts & Payments
Attached herewith are summaries of our receipts and payments as Receivers and Managers and also through the Allert Heard & Co. Trust Account in regard to the arrangements with Neil Marine Pty. Ltd. The respective balances in hand are $2,435.00 and $338.00.
Enclosed herewith is a cheque made payable to Citicorp Australia Ltd. for the balance held in the Allert Heard & Co. Trust Account.
......... Receivers and Managers Remuneration
Receivers and Managers fees and disbursements for the period March 16, 1987 to May 15, 1988 are $2,478.50 and $463.26 respectively therefore we would ask that you forward a cheque to us for the total of those two sums being $2,941.76.
......... Summary
We look forward to receiving your instructions in respect of the above matters.”
The matters which fall to be determined on this application are: first, whether or not privilege has been correctly claimed; and, second, if the section of the letter in respect of which privilege is claimed is protected by legal professional privilege, whether or not that privilege has been waived.
The first question requires me to determine whether a communication between co-plaintiffs, in the circumstances of this application, may be protected by legal professional privilege, whether or not the allegedly privileged communication relates to an abuse of process and whether or not privilege may be claimed where the privilege communication constitutes only part of the overall communication.
The section of the letter in respect of which privilege is claimed deals with, in the context of instructions to discontinue the action, the interlocutory injunction obtained by the plaintiffs in respect of the Poclain. It also deals with the litigation regarding Heytrack Australia Pty Ltd. I should mention that a copy of the letter, without the allegedly privileged parts being masked, is exhibited to an affidavit of Mr Marrone sworn on 16 August 1999. This was referred to during the course of argument and I have read the unabridged copy of the letter without objection from counsel. This has assisted me in arriving at my conclusions as to whether or not privilege has been properly claimed.
If the allegedly privileged section of the letter had been included in a letter from the plaintiffs’ solicitors to the plaintiffs, there is no doubt, in my view, that the communication would be privileged. However, in the circumstances of this case, Ms Layton QC, counsel for the first defendant, submitted that the communication could not be privileged because it formed part of a letter which contained non-privileged communications, that it concerned an abuse of the Court’s processes and that, even if privilege otherwise applied, it had been waived. She also submitted that the allegedly privileged section consisted of a recitation of matters, the source of which was not a previous communication by the plaintiffs’ solicitors to Messrs Heard and Young, but of matters which were of their own knowledge.
It was accepted by the plaintiffs that the onus of establishing privilege lay with the plaintiffs: Argyle Brewery Pty Ltd v Darling Harbourside (Sydney) Pty Ltd (1993) 120 ALR 537.
Mr P McNamara, counsel for the plaintiffs, relied upon the decision of Lockhart J in Trade Practices Commission v Sterling (1978) 36 FLR 244. In that case his Honour said (at 245):
“Legal professional privilege extends to various classes of documents including the following:
(a).... Any communication between a party and his professional legal adviser if it is confidential and made to or by the professional adviser in his professional capacity and with a view to obtaining or giving legal advice or assistance; notwithstanding that the communication is made through agents of the party and the solicitor or the agent of either of them ...
(b).... Any document prepared with a view to its being used as a communication of this class, although not in fact so used ...
(c).... Communications between the various legal advisers of the client, for example between the solicitor and his partner or his city agent with a view to the client obtaining legal advice or assistance ...
(d).... Notes, memoranda, minutes or other documents made by the client or officers of the client or the legal adviser of the client of communications which are themselves privileged, or containing a record of those communications, or relate to information sought by the client’s legal adviser to enable him to advise the client or to conduct litigation on his behalf. See Woolley v. North London Railway Co. (1869) L.R. 4 C.P. 602, at p. 604; Greenough v. Gaskell (1833) 1 My. & K. 98, at p. 102; Corporation of Bristol v. Cox (1884) 26 Ch. D. 678, at pp. 681-682; Woolley v. Pole (1863) 14 C.B.N.S. 583; Seabrook v. British Transport Commission [1959] 1 W.L.R. 509; Grant v. Downs (1976) 135 C.L.R. 674, and Bray, Principles and Practice of Discovery (1885) pp. 388-389.
(e).... Communications and documents passing between the party’s solicitor and a third party if they are made or prepared when litigation is anticipated or commenced, for the purposes of the litigation, with a view to obtaining advice as to it or evidence to be used in it or information which may result in the obtaining of such evidence ...
(f).... Communications passing between the party and a third person (who is not the agent of the solicitor to receive the communication from the party) if they are made with reference to litigation either anticipated or commenced, and at the request or suggestion of the party’s solicitor; or, even without any such request or suggestion, they are made for the purpose of being put before the solicitor with the object of obtaining his advice or enabling him to prosecute or defend an action ...
(g).... Knowledge, information or belief of the client derived from privileged communications made to him by his solicitor or his agent ...”
Trade Practices Commission v Sterling has been cited with approval in Commissioner of Australian Federal Police and Anor v Propend Finance Pty Ltd and Ors (1996-1997) 188 CLR 501 at 569 per Gummow J and applied by the Full Court in Health & Life Care Ltd v Price Waterhouse and Ors (1997) 69 SASR 362 at pp 369 and 370 per Lander J.
In my view, the section of the letter in respect of which privilege is claimed comes within category (d) referred to above. It is a document made by “the client” containing “communications which are themselves privileged” and they “relate to information sought by the client’s legal adviser to enable him to ... conduct litigation” on the client’s behalf. Like Lander J in Rouse v IOOF Trustees, unreported judgment [1999] SASC 127 at 15, I refrain from setting out the terms of the letter so as to avoid potential infringement of privilege.
The “sole purpose” test laid down in Grant v Downs (supra) must also be satisfied in relation to such a communication: Hongkong Bank Case and Trade Practices Commission v Sterling. Ms Layton argued that the sole purpose test was not made out because the allegedly privileged section of the letter formed only part of that letter. She argued that if the letter is read as a whole more than one purpose for its creation is disclosed. For example, the letter deals with other matters relating to Mr Cirillo and the company called Neil Marine Pty Ltd. It also refers to receipts and payments in relation to the receivership and the remuneration of the receivers and managers. If the additional material in the letter discloses more than one purpose behind its being sent, does the sole purpose test operate in the manner contended for by Ms Layton?
Mr McNamara contended that if a privileged communication was contained in a document which also contained non-privileged communications, privilege was not lost in respect of the privileged communication. He referred to the practice of the Court in this State which permitted privileged communications in documents which also contained non-privileged matters to be masked when inspection of the document was taken. (As will be seen later when I refer to the facts in more detail, this was done when the original of the letter was discovered and produced for inspection.) This practice, he contended, reflected the true principle underlying the protection of privileged communications whether they be made in a document which solely contains privileged communications or in a document which contains both privileged and non-privileged material.
Ms Layton, in support of her contention that the sole purpose test had not been satisfied, relied upon the decision of Smith J in the Hongkong Bank Case. In that case, the plaintiff, when giving discovery, inadvertently failed to claim privilege in respect of a number of documents. On inspection they were copied by the first and second defendants. The plaintiff sought orders restraining the first and second defendants from using the privileged information in the documents and requiring them to deliver up all copies. His Honour referred (at 429) to Trade Practices Commission v Sterling and set out the categories of documents referred to by Lockhart J in that case. It was argued that the sole purpose test only applied to category (d) referred to in the judgment of Lockhart J, but his Honour accepted, as the better view, that the sole purpose test should be applied to determine all claims of legal professional privilege. As I understand Mr McNamara’s submissions he did not contest this point. His Honour went on to say (at 430/17):-
“... Further, High Court authority does not in my view support the proposition relied upon by Hongkong Bank that privilege can attach to part of a document. The propositions advanced by the High Court advert to the whole document in question and the purpose of its creation. Severance was considered in Waterford’s Case [(1987) 163 CLR 54] by Mason and Wilson JJ., at p.66, and Dawson J., at p.103, but this occurred in the context of the Freedom of Information Act 1982 (Cth) which expressly provided for severance of passages that gave rise to claims of privilege for a document. Deane J. asserted that the common law permitted severance of a distinct part of a document that contained otherwise privileged material, at p.85, but this was not consistent, in my view, with the views expressed by other members of the court or earlier High Court decisions.
An issue arises, however, about the scope of the sole purpose tests. That topic was considered in Waterford’s Case. Mr. Waterford had applied to the Department of the Treasury under the Freedom of Information Act 1982 for access to documents about unemployment benefit projections. An issue arose as to whether certain documents were exempt under s. 42(1) of the Act because they were subject to legal professional privilege. They included letters that had passed between the Attorney-General and the Treasurer and memoranda which had passed between officers of the department and officers of the Crown Solicitor’s Office. The High Court treated the situation as one where it was looking at direct communications between lawyer and client and Mason, Wilson, Brennan and Deane JJ. applied the sole purpose test to such communications.
The correspondence emanating from or sent to the Attorney-General as minister responsible for the administration of the Freedom of Information Act sought or contained advice of a policy nature as well as legal advice. Not unnaturally, the appellant argued that documents containing or seeking policy and legal advice did not satisfy the sole purpose test. Mason and Wilson JJ., however, rejected the submission, stating, at p.66:
‘The appellant’s submission fails to appreciate that the sole purpose test is a test that looks to the reason why the document was brought into existence. If its sole purpose was to seek or to give legal advice in relation to a matter, then the fact that it contains extraneous matter will not deny to it the protection of the privilege. The presence of matter other than legal advice may raise a question as to the purpose for which it was brought into existence but that is simply a question of fact to be determined by the Tribunal and its decision on such a question is final.’
In addition, in considering documents for which privilege was claimed because they were professional communications between client and legal adviser ‘in connection with legal proceedings’, their Honours again applied the sole purpose test, stating, at p.67: ‘If a communication satisfies the description of a document brought into existence for the sole purpose of enabling a confidential professional communication between a client and his legal adviser in connexion with pending or anticipated legal proceedings then in our opinion it follows that it is an exempt document within the meaning of s. 42 of the Act. In such a case it is not to the point that the document may contain advice which relates to matters of policy as well as of law. It is the connexion between the document and legal proceeding that establishes its character and thus attracts the privilege.’
These passages should be compared with the analysis in National Employers’ Mutual General Insurance Association Ltd. v. Waind (1979) 141 C.L.R. 648. Mason J. (with whom the other members of the court concurred) considered the scope of the sole purpose test in its application to reports by a firm of loss assessors hired by the client - i.e., communications between the client and third parties. Counsel for the appellant had submitted, at p. 656: ‘If, on the facts, the documents are brought into existence for the dual purpose of deciding what it will do and for use in litigation by legal advisers when appropriate, that purpose should be considered as one purpose which, including as it does submission to legal advisers, would attract the relevant head of privilege.’
Mason J., commenting on this argument, said, at p. 656: ‘Unfortunately for the appellant, it is an argument which runs headlong into Grant v. Downs. As Glass J.A. observed in the Court of Appeal when he applied the remarks of Stephen, Mason and Murphy JJ. in Grant v. Downs: “If a purpose which actuates the party who commissions documents is not single but multiple each must be identified. Unless all of them fall within the protected group of purposes namely submission to legal advisers or use in litigation, no privilege attaches.” ’
If a document contains both policy advice and legal advice it is difficult realistically to say that it was not brought into existence for a dual purpose. My reading of the above passages from Waterford’s Case suggests to me that there has been a shift in emphasis in the formulation of the sole purpose test to a position more akin to that adopted by Jacobs J. in Grant v. Downs - whether the purpose of supplying the material to the legal adviser accounts for its existence: at pp. 692 and 694 ...
Deane J., who dissented, considered, inter alia, the issue of the application of legal professional privilege to the disputed documents and described them as documents that: ‘Contained or recorded both legal professional advice given by the Crown Solicitor’s Office and general policy advice given by the “Freedom of Information” section of the Attorney-Generals Department.’
After referring to the fact that the Act allowed for the severing of privileged portions, his Honour went on to say, at pp. 85-6: ‘If it were not possible to classify the contents of the documents into distinct parts, it would be necessary to determine whether the contents as a whole were outside the protection of legal professional privilege for the reason that, notwithstanding the professional legal advice, they did not satisfy what has conveniently, if somewhat loosely, been referred to as “the sole purpose test” ... That test looks to the purpose for which the contents of a document were brought into existence. To adapt the words of Stephen, Mason and Murphy JJ. in Grant v. Downs, a document (or a severable part of a document) will not be protected by legal professional privilege if it “would have been brought into existence ... in any event” for purposes other than that which attracts legal professional privilege ... Applying that test to the circumstances of the present case, a document containing general policy advice from the “freedom of information” section of the Attorney-General’s Department would not prima facie enjoy the protection of legal professional privilege if the moving purpose underlying its preparation had been to convey advice about the observance and application of general government policy proffered by the section of the Department responsible for the general administration of the Act. For the document to be protected, the cause of its existence, in the sense of both causans and sine qua non, must be the seeking or provision of professional legal advice.’ Thus his Honour also appeared to apply a test similar to that of Jacobs J. in Grant v. Downs - whether the purpose of supplying the material to the legal adviser accounts for its existence. I note that Gummow J. appears to have adopted Deane J.’s ‘moving purpose’ test in deciding whether the transcripts of examinations under s. 541 of the Companies Code were privileged: Hartogen Energy Ltd. v. Australian Gas Light Co. (1992) 109 A.L.R. 177, at p. 187.
Dawson J. adopted a different approach. He commented, at p. 95, that the legal professional privilege relied upon in the case was that: ‘which attaches to communications between a legal adviser and his client for the purpose of giving or receiving legal advice and to documents recording those communications or containing information for the purpose of enabling the advice to be given. In order to attract that privilege, the communications must be confidential and the legal adviser must be acting in his professional capacity ...’
Later in his judgment, Dawson J. dealt with the issue of dual purpose in the following passage, at p. 103: ‘It was submitted that if a document containing or recording legal advice also included policy advice it could not survive the sole purpose test laid down in Grant v. Downs and should have been produced. But Grant v. Downs was a decision in which this Court refused to extend legal professional privilege to material obtained by a corporation from its agents for more than one purpose, only one of which was the purpose of submission to its legal advisers in order to obtain legal advice. Documents of that kind are not privileged because the communications or intended communications which they contain belong in a category which does not attract privilege, albeit they also belong in a category which does. Legal advice given by a qualified legal adviser in his professional capacity to his client falls only within the category of a communication which is privileged. Legal advice serves no other function than legal advice. No doubt if the legal advice is accompanied by advice of another kind which can be separated from it, e.g., by blanking out parts in a document, then only the legal advice will be privileged. But if the legal advice contains extraneous matter which cannot be separated from it, the legal advice will not lose its privilege for that reason. There is only one purpose in legal advice and the privilege which it attracts cannot be lost by the application of the principle which applies when a document containing information of a factual nature is brought into existence for more than one purpose.’
Thus, his Honour, while appearing to accept the sole purpose test, treated documents containing legal advice and extraneous matter as being documents that are properly categorised as having only one purpose - that is, legal advice. His Honour’s comments can be interpreted, however, as meaning that he was assuming that the provision of the legal advice was the dominant purpose. However his comments be interpreted, it is clear that his Honour was treating the sole purpose test as being satisfied where a document came into existence for more than one purpose where that purpose included the provision of legal advice to the client.
The sole purpose test has been criticised as being too narrow (see comments collected in Australian Law Reform Commission, Interim Evidence Report No. 26, Vol. I, p. 250; the traditional rationale has also included issues not adopted by the High Court - A.L.R.C., Vol. 1, p. 494; and see generally N. J. Williams, ‘Discovery of Civil Litigation Trial Preparation in Canada’ 1980 58 Can. Bar Rev. 1.). What I perceive to be a subtle redefinition of the concept in Waterford’s Case may reflect the fact that the High Court is concerned that a sole purpose test is too narrow.
In light of the law as it has been developed in the High Court, it seems to me that the approach I should take is to treat the sole purpose test as the test to be applied whenever a claim of legal professional privilege is raised regardless of the category of document or communication. While the High Court in Waterford’s Case may have redefined the concept of ‘sole purpose’, it did not purport to confine its remarks to a particular category of document or communication and the language used, as in earlier decisions, suggests an intention that the principles stated are to be of general application. I will also proceed on the basis that the sole purpose test is concerned with the purpose that accounts for the existence of the document in question and I will apply that test in determining whether privilege attaches to any of the documents for which it has been claimed.”

As I understand Ms Layton’s submission, it is that, if a document contained in part a privileged communication, privilege would not attach to that communication at least in the circumstances of this case. Although it is not clear from the various High Court decisions referred to above what the position is with regard to a document such as the letter the subject of this application, I do not understand the ratio of Smith J’s decision to be that a document which contains a privileged communication as well as other material cannot be the subject of a claim of privilege. His Honour was concerned (at 433/35) with “the purpose that accounts for the existence of the document”. None of the High Court authorities referred to, in my view, precludes the application of the privilege to part of a document. In this respect the analysis of Dawson J in Waterford’s Case is not confined to a question of severance which may be allowed under the provisions of the Freedom of Information Act 1982 (Cth). His comments are directed to legal advice given to a client. He has allowed for the blanking out of parts of a document because he was of the view that the non-privileged sections of the document would not attract the privilege.
On the one hand, Mason and Wilson JJ in Waterford stated that the presence of matter other than legal advice may raise a question as to the purpose for which the document was brought into existence but, on the other hand, Dawson J referred to the provision of legal advice not confined to the specific provisions of the Freedom of Information Act which allowed for severance. In those circumstances I consider that the application of privilege to part of a document is still open, at least to the extent that the non-privileged material does not disclose an additional purpose for the written communication. I bear in mind that much of the documentation considered by Smith J contained, quantitatively, only minor reference to matters which, taken in isolation, would attract legal professional privilege. In this case the greater part of the letter contained what would otherwise be a privileged communication.
In light of the above reasoning, I proceed on the basis that, in the circumstances of this case, privilege can attach to that portion of the letter in respect of which privilege has been claimed. If I am wrong in that view, I consider that the plaintiffs in any event come within the test applied by Smith J in the Hongkong Bank Case. In my view, notwithstanding the non-privileged material contained in the letter, the purpose that accounts for the existence of the document is the purpose of obtaining instructions to be given by the plaintiffs to their solicitors relating to these and the Victorian proceedings. I reject Ms Layton’s submission that the presence of other than privileged communications in the letter demonstrate that the letter had more than one purpose.
I have so far approached the question of privilege without taking into account the submission of Ms Layton that the content of the privileged section of the letter loses the privilege that would otherwise attach to it because it relates to an abuse of process. It was contended by Ms Layton that where a communication which would otherwise be privileged discloses that a party to proceedings has committed an abuse of process, privilege may not be claimed. She relied upon Southern Equities Corporation Ltd (In Liq) v Arthur Andersen & Co (1997) 194 LSJS 457 and Rouse and Ors v IOOF Australia Trustees at 18-19. Mr McNamara contended that no abuse of process was disclosed in the communication but, in any event, even if an abuse of process were disclosed, the communication merely evidenced an abuse of process and was not in furtherance of it.
In referring to the privileged section of the letter, Ms Layton submitted that it disclosed that at least at the time when the letter was written (25 May 1998) Mr Heard and Mr Young were aware that they lacked certain evidence in relation to the ownership of the Poclain, but this ignores the fact that in the very same paragraph reference is made to evidence that they did have which indicated that the Poclain was owned by the second plaintiff and not the first defendant. The fact that the plaintiffs obtained an injunction with evidence that might later be found to be insufficient does not constitute, in my view, an abuse of the Court’s processes. It is a fact of life that litigation is uncertain and that at the end of the day a contention as to ownership may not be able to be made out. After a careful consideration of the terms of the letter I have formed the view that the privileged section of the letter does not evidence an abuse of process on the part of the plaintiffs or any of them let alone constitute any furtherance of an abuse of the Court’s processes. I have taken into account, in arriving at that conclusion, Ms Layton’s submission that there had been a failure on the part of the plaintiffs to bring to the attention of the Court the fact that the plaintiffs lacked certain specific documentary evidence as to title in respect of the Poclain and the submission that the plaintiffs failed to apply for a discharge of the injunction because, it was asserted, the plaintiffs were concerned that the first defendant may bring an action for damages pursuant to the undertaking as to damages. In my view there was no obligation on the plaintiffs to bring to the attention of the Court the lack of the specific evidence of title referred to in the letter. The situation may have been different if the injunction had been obtained on an interim ex parte basis, but this was not the case. Nor does the mention of damages in relation to the injunction indicate any abuse of process.
For the above reasons, I do not consider that privilege has been lost on the ground of abuse of process.
I turn to the question of waiver. Mr Marsden’s affidavit discloses that initially the original of the letter in the possession of the first plaintiff was discovered in a list dated 10 November 1997. It was given the designation “DC415”. The letter was also discovered in a list of documents filed on 11 March 1999 and in that list it bore the same designation. In each instance the letter was discovered in the non-privileged section of the list of documents but the description of the document included the words “except portion subject to privilege (Part 2 First Schedule)”.
Inspection of the discovered documents took place late in 1997. On that occasion the letter was produced to Mr Marrone with the privileged portions masked out.
On 19 July 1999 the plaintiffs filed what was entitled a fourth list of documents which discovered in excess of 1 000 documents contained in various files which had not been previously discovered. The files contained the third and fourth plaintiffs’ file copy of the letter and a photocopy of that letter. They were mistakenly included in the unprivileged section of the list of documents. Mr Jucha, a solicitor in the employ of the plaintiffs’ solicitors, prepared the list and did not realize that the copy of the letter included within the fourth list of documents prepared by him was a copy of the original previously discovered in respect of which privilege had been claimed. The reason for this was that he did not check the documents discovered in the fourth list against the earlier lists of documents due to time constraints.
In his affidavit sworn on 9 September 1999 Mr Marrone referred to his inspection of documents after the fourth list of documents had been filed and served. He said:-
“... I was at the offices of Finlaysons from 10.45 a.m. to approximately 12.30 p.m. I then returned to the offices of Finlaysons at approximately 2.45 p.m. Mr G. King of Finlaysons met me and took me to the 11th Floor for me to continue my inspection. It was during that inspection that I had read the copy of the office copy of Mr J. Heard’s letter to Citicorp dated the 26th May 1988 (‘the Heard letter’). Mr King came into the office where I was inspecting the documents. I showed Mr King the copy of the Heard letter and asked him if I could have a copy of it that afternoon so that I could work on it overnight. I informed him that there were other copy documents I would require but I would send him a list of copy documents I required once I had completed my inspection of all documents. Mr King informed me that he would check and let me know. Mr King returned approximately 10 minutes later and handed me a copy of the Heard letter. I continued with my inspection until approximately 4.30 p.m.”
By letter dated 27 July 1999 Mr Marrone wrote to the plaintiffs’ solicitors regarding the content of the letter. It was then realized by the plaintiffs’ solicitors that an unmasked copy of the letter had been provided to the first defendant’s solicitor.
In his affidavit of 21 September 1999 Mr Marrone stated:-
“4..... At no time when I inspected the office copy of the Heard document DR1385 on the 20th July 1999 ... did I form the view that the document was privileged as the communication was between the Receiver and Citicorp and the legal advice from Finlaysons was stated to be in attachments which I did not see. My focus was on the content of the letter as later detailed in my letter of 27th July 1999 ...”
The plaintiffs accept that when Mr Marrone asked for and received a copy of the letter of 20 July 1999, he did not realize that it was a document which had been previously the subject of a claim for privilege.
Ms Layton submitted that there were three occasions upon which the plaintiffs waived privilege in respect of the letter. The first was when the first list of documents was discovered and inspection of the masked copy of the letter was undertaken by Mr Marrone on 4 December 1997. It was argued that the plaintiffs did not appropriately claim privilege in respect of the document because it had not been included in Part 2 of the First Schedule. I reject this submission. Although technically the document was not included in the correct part of the list of documents, there was a clear claim for privilege at the end of the description of the document in Part 1 of the Schedule.
The second occasion of waiver occurred on 19 and 20 July 1999 when respectively the fourth list of documents was filed and served and Mr Marrone took inspection of documents. No claim for privilege was made in respect of the letter or any copies thereof and a copy of the letter was obtained on inspection on 20 July 1999. The third occasion occurred when Mr Marrone attended the plaintiffs’ solicitors office on 28 July 1999 to inspect documents and saw an unmasked copy of the letter.
In respect of the second and third occasions, Ms Layton relied upon Meltend Pty Ltd and Anor v Restoration Clinics of Australia Pty Ltd & Ors (1997) 75 FCR 511 at 518.
Mr McNamara argued that although privilege may be lost once inspection of the document is taken, it is not an invariable rule. He submitted that the question of waiver was to be derived from considerations of fairness as between the parties. He relied upon Goldberg & Anor v Ng & Ors (1995) 185 CLR 83 and Ulgera Gap Nominees Pty Ltd & Ors v Elders Ltd & Ors (1996) 188 LSJS 383, a decision of Perry J.
Before I turn to the authorities on implied or imputed waiver, I should deal with the contention of Ms Layton that there had been an intentional waiver on the part of the plaintiffs. As I understand it, her submission was confined to the intention of the solicitor who handed over a copy of the document to Mr Marrone rather than the intentions of the plaintiffs. In my view, the submission must fail because the inference cannot be drawn from the facts before me that the solicitor intended to waive privilege (irrespective of his instructions) when he handed the copy of the letter to Mr Marrone. Privilege had clearly been claimed in previous lists of documents. The solicitor certainly intended to hand the copy to Mr Marrone but that is a different intention from waiving privilege. It is common ground that the plaintiffs’ solicitors gave no instructions to waive privilege and it is clear from the affidavits of the three solicitors involved in discovery of documents on behalf of the plaintiffs that none of them at any time intended to waive privilege on behalf of their clients. Thus, the only form of waiver that can be relied upon by the first defendant is implied or imputed waiver. Such a conclusion must follow from the reasoning of the majority of the High Court in Goldberg v Ng, per Deane, Dawson and Gauldron JJ at 95.
Goldberg v Ng involved an application for a declaration that documents produced on subpoena were protected from compulsory disclosure by legal professional privilege. On the question of imputed waiver the majority said (at 96):
“... Necessarily, the basis of such an imputed waiver will be some act or omission of the persons entitled to the benefit of the privilege. Ordinarily, that act or omission will involve or relate to a limited actual or purported disclosure of the contents of the privileged material. When some such act or omission of the person entitled to the benefit of the privilege gives rise to a question of imputed waiver, the governing consideration is whether ‘fairness requires that his privilege shall cease whether he intended that result or not’ [Wigmore on Evidence (McNaughton rev 1961), vol 8, par 2327 quoted with approval by Gibbs CJ and by Mason and Brennan JJ in Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 481, 488] ...
In Attorney-General (NT) v Maurice, it was accepted in all judgments that the question whether a limited disclosure gives rise to an implied or imputed waiver of legal professional privilege ultimately falls to be resolved by reference to the requirements of fairness in all the circumstances of the particular case.”
This was the view taken by Doyle CJ in Cole v Dyer, unreported judgment [1999] SASC 272 where his Honour dealt with the question of whether or not there had been a waiver of privilege by a litigant in instructing an expert to provide a report in respect of the litigation.
In Meltend Pty Ltd Goldberg J exhaustively reviewed the authorities relating to waiver of privilege. In that case discovery had been given by party to litigation where there had been a failure to claim privilege in the affidavit of respective documents which would otherwise attract privilege. Inspection of the document was taken by the other party’s solicitor and later a request was made for a copy of the document in respect of which there had been a failure to claim privilege. That request was refused and for the first time privilege in respect of the document was claimed. The applicant sought orders requiring the discovering party to provide a copy of the document contending that privilege had been waived by the inclusion of the document in the list and by producing it for inspection. The respondent’s to the application contended that there had been no express or implied waiver and that the inclusion of the document in the non-privileged section of the list was a mistake. Goldberg J came to the conclusion that there had been an express waiver of privilege by the inclusion of the document in the non-privileged section of the list and by the inspection taken by the other party to the proceedings. He ordered that a copy of the document be provided by the discovering party. Having reviewed the authorities Goldberg J dealt with the nature of the mistake made by the solicitor at the time of giving discovery. He said (at 522F):-
“... On the basis of these facts it appears that if there was a mistake, the mistake was not that a decision had been made to claim privilege in respect of the document but that inadvertently or by mistake it had been wrongly included in Pt 1 of Sch 1 to the list. Rather the mistake was that although he decided not to claim privilege in respect of the letter he now says he should have done so because having regard to what he now knows he misunderstood the nature of the document.”
That is not the nature of the mistake made on this occasion. There had previously been a clear claim for privilege in respect of the originals and copies of the letter. The mistake made by the solicitor was a failure to realize that previously privilege had been claimed in respect of the original letter and copies thereof. There was also a mistake made by the first defendant’s solicitor; when he took inspection and obtained a copy of the letter, he did not realize that there had been a previous claim of privilege in respect of that letter and that he had previously obtained a masked copy of it. That, in my view, is a material point of distinction. It is to that fact situation that the principles enunciated in Goldberg v Ng, Attorney-General (NT) v Maurice, Cole v Dyer and Ulgera Gap Nominees Pty Ltd are to be applied.
What is the potential unfairness to the first defendant if the Court does not impute waiver to the plaintiffs? The first defendant wishes to amend his claim for damages to add a claim based on an alleged abuse of process on the part of the plaintiffs in obtaining the injunction relating to the Poclain. He wishes to use the statements contained in the letter as evidence of admissions made by the third and fourth plaintiffs that there has been an abuse of the Court’s processes. I have already indicated when dealing with the question of whether or not privilege attaches to that part of the letter in respect of which privilege is claimed, that it does not disclose an abuse of process. In view of that conclusion it can hardly be said that it would be unfair to the first defendant not to impute waiver of privilege. That was the approach taken by Lander J in Rouse v IOOF Australia Trustees when his Honour directed the return of the documents.
There appears to be no other detriment to the first defendant if waiver is not imputed. If waiver is imputed, the plaintiffs lose the benefit of the privilege which they would otherwise have but for the inadvertence of their solicitors. It seems to me in those circumstances that ordinary notions of fairness require the privilege to be maintained.
For the above reasons, there will be orders in terms of paragraphs 1, 2 and 3 of the application. I will hear counsel as to costs.

[1999] SASC 417

29 September 1999