Contract Control Services Pty Ltd v Thirteenth Sonmar Pty Ltd
[2021] VCC 925
•12 July 2021
A
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
BUILDING CASES LIST
Case No. CI-21-01718
| CONTRACT CONTROL SERVICES PTY LTD (ABN 33007453965) | Plaintiff |
| v | |
| THIRTEENTH SONMAR PTY LTD (ABN 66063329253) | Defendant |
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JUDGE: | Judge Burchell | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 8 July 2021 | |
DATE OF JUDGMENT: | 12 July 2021 | |
CASE MAY BE CITED AS: | Contract Control Services Pty Ltd v Thirteenth Sonmar Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2021] VCC 925 | |
REASONS FOR JUDGMENT
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Subject: Preliminary Discovery – Privilege
Catchwords: client privilege – waiver – courts discretion to inspect documents – preliminary discovery
Legislation Cited: ss 117, 118, 119, 122, 126 and 142 Evidence Act 2008 (Vic), r32.05 County Court Civil Procedure Rules 2018, ss 18, 42 Civil Procedure Act 2010 (Vic)
Cases Cited:Pandolfo v Finadri [2018] VSC 211, Workcover Authority of NSW, General Manager v Law Society of NSW (2006) 65 NSWLR 502, Telstra Corp v Australis Media Holdings (1997) 41 NSWLR 147, Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404, AWB (No 5) v Cole [2006] FCA 1234, Grant v Downes (1976) 135 CLR 674, Barnes v Commissioner of Taxation (2007) 242 ALR 601, Hancock v Rinehard (Privilege) [2016] NSWSC 12, Trade Practices Commission v Sterling (1979) 36 FLR 244, Kennedy v Wallace [2204] 142 FCR 185, Osland v Secretary to the Department of Justice (2008) 234 CLR 275, Commissioner of Taxation v Rio Tinto Ltd (2006) 151 FCR 341, ANZ Banking Group Ltd v ANZCover Insurance Pty Ltd [2005] VSC 21, Mann v Carnell [1999] 201 CLR 1, DSE (Holdings) Pty Ltd v Intertan Inc (2003) 127 FCR 499, Hodgson v Amcor Ltd [2011] VSC 204
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr L Currie | KCL Law |
| For the Defendant | Mr R Andrew | Colin Biggers & Paisley |
HER HONOUR:
1 In this proceeding, Contract Control (“Contractor”) applies for preliminary discovery against Thirteenth Sonmar (“Owner”) pursuant to r32.05 of the County Court Civil Procedure Rules 2018 (“Rules”).
2 Three issues arise for determination:
(a) First, whether the documents listed in the Originating Motion relate to the question of whether the Contractor has the right to obtain relief from the Owner;
(b) Secondly, whether the Owner has discharged the onus of establishing the relevant matters giving rise to its claims of privilege under Part 3.10 of the Evidence Act 2008 (Vic) (the Act); and
(c) Thirdly, if any of the documents listed in the Originating Motion are found to be privileged, whether privilege over those documents and associated material has been waived.
3 In my view, grounds (a) (b) and (c) have been made out. My reasons are set out below.
4 Accordingly, I order that the Owner discover the documents that conform with the Categories set out in the Originating Motion and that are in their possession or control, by:
a. allowing the Contractor to inspect and copy the documents; or
b. providing a copy of the documents to the Contractor at a reasonable cost.
5 I will also order that the Owner pay the Contractor’s costs incurred in this proceeding, including reserved costs, to be taxed on a standard basis in default of agreement, unless either party has a basis for a different order as to costs. The Contractor pay the reasonable legal costs of the Owner’s compliance with these orders, to be taxed on a standard basis in default of agreement.
6 I invite the parties to prepare draft orders to give effect to these reasons. I will determine any issue concerning costs on the papers.
The facts
7 In a related proceeding, CI-21-01009 Thirteenth Sonmar v Contract Control, Thirteenth Sonmar seeks summary judgment pursuant to an architect’s certificate in the sum of $1,029,416.24.
8 The dispute arises from a building contract (the Contract) between Thirteenth Sonmar (as owner) and Contract Control (as head contractor) in which Contract Control was required to carry out, in three stages, the partial demolition and reconstruction of the Wonthaggi Medical Centre at 42-44 Murray Street, Wonthaggi, Victoria 3995 (Project).
9 The Contract nominated Garner Davis Architects Pty Ltd (the Architect) as the architect to administer the Contract.
10 On or about 13 May 2011, Garner Davis Architects Pty Ltd (Architect) issued a notice of practical completion for Stage 1 of the Project.
11 On or about 2 March 2012, the Architect issued a notice of practical completion for Stages 2 & 3 of the Project.
12 After practical completion, there were a large number of alleged defects and/or incomplete items of work. Between 19 August 2011 and 14 July 2016, the Architect issued 34 instructions to Contract Control to correct defects or finalise incomplete work (Architect's Instructions).
13 Thirteenth Sonmar claims that Contract Control did not satisfactorily rectify the majority of the items the subject of the Architect’s Instructions and that by early 2015 substantial defects and incomplete items remained.
14 Thirteenth Sonmar contends that Contract Control failed to attend to the rectification works and it engaged its own contractors to carry out them out. This included engaging a number of consultants to advise on the best course of rectification, and then subsequent engagement of contractors to complete said works. This process took a considerable period of time, and was completed in 2020.
15 Thirteenth Sonmar then served a claim on the Architect dated 30 September 2020, to adjust the Contract for the cost of having the alleged defects corrected and the incomplete work finalised.
16 In purported compliance with clause N5 of the Contract, the Architect issued a progress certificate dated 23 December 2020, certifying the sum of $1,029,416.24 including GST due and payable by Contract Control to Thirteenth Sonmar (Progress Certificate).
17 Contract Control contends that:
a) The Contract required the Owner to appoint an architect to administer the Contract (clauses A4.1(d) and A6.2).
b) The Owner appointed, and the Contract expressly nominated, Garner Davis Architects Australia Pty Ltd (“Architect”) as the architect to administer the Contract (clause A6.1 and Item 2 of Schedule 1).
c) The Contract nominated Lindsay Davis as the Architect’s representative (Item 2 of Schedule 1).
d) The Contract stated:
(i) “in acting as assessor, valuer or certifier, the architect acts independently and not as the agent of the owner” (clause A6.3);
(ii) “the owner must ensure that the architect, in acting as assessor, valuer or certifier, complies with this contract” (clause A6.4);
(iii) “the owner must ensure that the architect, in acting as assessor, valuer or certifier… acts fairly” (clause A6.4);
(iv) “the owner must ensure that the architect, in acting as assessor, valuer or certifier… acts… impartially” (clause A6.4);
(v) “the owner must ensure that the architect, in acting as assessor, valuer or certifier… ha[s] regard to the interests of both the owner and the contractor (clause A6.4);
(vi) “the owner must not compromise the architect’s independence in acting as assessor, valuer or certifier” (clause A6.4).
e) The last of the defects liability periods for stage 1, stage 2 and stage 3 came to an end in March 2013 (12 months after practical completion of stages 2 & 3 of the works).
f) More than 7 years later, on or about 23 December 2020, the Contractor received a letter from the Architect (“Cover Letter”), which stated:
We confirm that Garner Davis Architects have received and assessed an Owners Claim for costs associated with the rectification of internal and external building defects…
Please refer to Progress Payment Certificate no. PP21 which certifies [an] amount payable by [the Contractor] to [the Owner] of $1,029,416.24 including GST…
We are advised that [the Owner] will forward the Owners Claim to [the Contractor].
g) The Contractor had not seen the “Owners Claim” nor been advised of such as referred to in the Cover Letter.
18 On or about 1 April 2021, the Contractor issued to the Owner and the Architect a Notice of Dispute under clause P2 of the Contract (“Notice of Dispute”).
19 Contract Control’s position is that:
(a) the Architect’s purported assessment and purported certification were not in accordance with the Contract;
(b) the Purported Certificate is invalid;
(c) the Architect was obliged to inform the Contractor as to the existence of the Owner’s Purported Claim prior to any purported certification of the claim;
(d) the Architect was obliged to provide the Contractor with an opportunity to be heard on the matters raised in the Owner’s Purported Claim prior to any purported certification of the claim.
(e ) the Contract states that the Architect must “hav[e] regard to the interests of both the owner and the contractor” (clause A6.4, emphasis added). The interests of the Contractor and the position of the Contractor were not able to be communicated to the Architect prior to the purported certification;
(f) when preparing and issuing the Purported Certificate;
(i) the Architect did not engage in a process of assessment;
(ii) instead, the Architect adopted the figures put forward by the Owner in its Purported Claim.
20 The Notice of Dispute alleges that from the documents received from the Owner’s lawyers:
(a) the Owner and the Architect may have been liaising or working together on the Owner's Purported Claim and the Architect's Purported Certificate;
(b) the Architect may have been acting in a subservient manner, including in connection with the Owner's Purported Claim and the Architect's Purported Certificate.
21 Contract Control contends that such conduct would contravene the express obligations and the implied obligations (including the requirements concerning independence, fairness, impartiality, the interests of the Contractor, honesty, reasonableness and/or good faith).
22 For example, Contract Control submits that the Architect's invoices produced by the Owner show that there was extensive interaction between the Architect and the Owner (including persons acting on behalf of the Owner, particularly the Owner's lawyers) in the lead up to the Owner's Purported Claim and the Architect's Purported Certificate.
The legal context
23 Rule 32.05 provides:
Where -
(a) there is reasonable cause to believe that the applicant has or may have the right to obtain relief in the Court from a person whose description the applicant has ascertained;
(b) after making all reasonable inquiries, the applicant has not sufficient information to enable the applicant to decide whether to commence a proceeding in the Court to obtain that relief; and
(c) there is reasonable cause to believe that that person [the Owner] has or is likely to have or has had or is likely to have had in that person's possession any document relating to the question whether the applicant has the right to obtain the relief and that inspection of the document by the applicant would assist the applicant to make the decision.
the Court may order that that person shall make discovery to the applicant of any document of the kind described in paragraph (c).
24 Derham AsJ in Pandolfo v Finadri[1] set out the principles relevant to the first criterion are as follows:
[1][2018] VSC 211 at [20].
(a) the applicant is not required to show it that has a prima facie case that it has a right to relief;
(b) it is also not necessary to show precisely what cause of action the applicant may have; such a requirement would defeat the object of the rule;
(c) rather, it merely needs be shown that the facts are such that it may reasonably be believed that the applicant may have a right to obtain relief;
(d) the test for determining whether the applicant has ‘reasonable cause to believe’ is an objective test;
(e) the word “may” indicates that the applicant’s belief does not have to amount to a firm view that there is a right to relief.
25 The present case only involves a claim for advice privilege. Section 118 of the Act provides confidential communications and confidential documents that have been prepared for the dominant purpose of providing legal advice to the client are privileged. Legal advice includes any advice of what “may be prudently and sensibly done in the relevant legal context”.[2]
[2]Workcover Authority of NSW, General Manager v Law Society of NSW (2006) 65 NSWLR 502 at [77].
First Ground Preliminary Discovery
26 The first ground relied upon by the Contractor is that there is reasonable cause to believe that the Contractor may have the right to obtain relief in the Court.
27 That potential relief may include:
(a) a declaration that the Owner has breached the Contract (by engaging in conduct or communications with the Architect prohibited by the Contract); and/or
(b) a declaration that the Owner has breached the Contract (by reason of the Owner and the Architect liaising or working together on the Owner's Purported Claim and/or the Architect's Purported Certificate); and/or
(c) a declaration that the Owner has breached the Contract (by reason of the Architect acting in a subservient manner, including in connection with the Owner's Purported Claim and/or the Architect's Purported Certificate); and/or
(d) an order restraining the Owner (including any person acting on behalf of the Owner and specifically including the solicitors for the Owner) from communicating privately with the Architect in connection with the exercise of the Architect's assessment and certification roles under the Contract (Potential Relief).
28 The Contractor contends that it has made all reasonable enquiries. The Contractor's lawyers have issued three separate letters and emails to the Owner's lawyers regarding the documents referred to in the Originating Motion.
29 The Contractor's lawyers have sought to obtain the documents from the Architect. However, through its lawyers the Architect has indicated that it does not intend to produce any of the documents sought.
30 The Contractor submits that it does not have sufficient information to enable the Contractor to decide whether to commence a proceeding in the Court for the Potential Relief particularly in light of its obligations under the Civil Procedure Act 2010, including the "proper basis" obligations in sections 18(d) and 42 of that Act.
31 The Contractor's position is that it does not have sufficient information to know the extent of the Owner's breach or what defences might be available to the Owner (or the possible strength of those defences).
32 The Contractor's position is that, based on the evidence before the Court, the Owner has (or is likely to have) in its possession, custody or power the documents referred to in the Originating Motion.
33 Ground (a) has been made out. It was appropriate for the Contractor to bring the application and to not make allegations about any lack of independence of the Architect without a proper basis.
Second ground claims of privilege
34 Client privilege pursuant to the Act protects communications between a legal adviser and client from compulsory disclosure. The Contractor seeks to contest the existence of privilege asserted by the Owner. Alternatively, they argue that privilege has been waived. A client includes an agent of the client under the Act (s117(1)(b)).
35 To establish privilege under s118(a) and (b), the claimant must satisfy three limbs:
(a) communications must pass between the client and the client’s legal adviser (or between 2 or more lawyers acting for the client);
(b) the communications must be made for the dominant purpose of providing legal advice to client (advice privilege); and
(c) the communication must be confidential.
36 “Legal advice” has been interpreted broadly. It may incorporate commercial advice, but the dominant purpose must remain the provision of legal advice. Privilege will not attach to advice given for a purely commercial or non-legal purpose. The advice must be professional advice given by a lawyer who is acting in a legal capacity to provide legal advice. The advice can go beyond formal matters of law but it must relate to the law. Further, the relevant time for assessing whether the conditions for a valid claim of privilege are satisfied is the time in which the communication was made or the document prepared.
37 Privilege attaches to any confidential document prepared by a client, lawyer or third party (for example, proposed expert witness or an accountant) for the dominant purpose of legal advice being obtained. It does not extend to all communications with a third party (client and lawyer or between two or more lawyers acting for the client sections118(a) and (b)).
38 Unlike section 119 “Litigation Privilege”, section 118 does not protect confidential communications between the solicitor or client and third parties. Advice Privilege only protects the contents of a confidential document prepared by the client, lawyer or another person for the dominant purpose of the lawyer providing legal advice to the client. This difference is consistent with the ALRC view that third party communications for legal advice should not be privileged.
39 In Telstra Corp v Australis Media Holdings[3] (Telstra), McClelland CJ in Eq adopted a narrow interpretation of section 118(c). This is because to read it broadly would subsume most if not all of the communications falling within sections (a) and (b). The Act therefore applies to documents prepared for the required dominant purpose, even if the document is in draft format and is not communicated to the client.
[3](1997) 41 NSWLR 147 at [149].
40 “Communication” is not a defined term in the Act. The Macquarie Dictionary meaning includes “the imparting or interchange of thoughts, opinions or information by speech, writing or signs”. In Telstra[4], McClelland CJ in Eq further noted that if the “essential character” of the document is that of a communication then subsection (c) is not engaged and the document must find its privilege under sections (a) or (b). If the essential character of the document is not a communication, then subject to satisfying the other requirements, it may be protected under section (c).
[4]Ibid.
41 In Federal Commissioner of Taxation v Spotless Services Ltd[5], the dominant purpose test was explained as follows:
In its ordinary meaning, dominant indicates that purpose which was the ruling, prevailing or most influential purpose.
[5](1996) 186 CLR 404 at [416].
42 The final limb is that the communication between the legal adviser and the client must be confidential. Having a third party present at the time of the communication does not necessarily prevent it from being privileged, however, it has a tendency to point towards a conclusion that the communication was not intended to be confidential.
43 Where communications take place between a client and his or her independent legal advisers, it may be appropriate to assume that legitimate legal advice was being sought, absent any contrary indications in the ordinary case of a client consulting a lawyer about a legal problem in uncontroversial circumstances, proof of those facts alone will provide a sufficient basis for a conclusion that legitimate legal advice is being sought or given.[6]
[6]AWB (No 5) v Cole [2006] FCA 1234 at [44] per Young J.
44 Section 117 of the Act provides the following definitions of “confidential communication” and “confidential document”:
"confidential communication" means a communication made in such circumstances that, when it was made—
(a) the person who made it; or
(b) the person to whom it was made—was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law;
"confidential document" means a document prepared in such circumstances that, when it was prepared—
(a) the person who prepared it; or
(b) the person for whom it was prepared—was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law; …
45 The party claiming the legal advice privilege bears the onus of establishing the basis of the claim. The party seeking production does not bear the onus of excluding privilege.
46 That is, the Owner must establish facts from which the court can determine the basis of the claim for privilege and whether the privilege is capable of being asserted. The facts are to be proved on the balance of probabilities (section 142 of the Act).
47 The onus can be met by evidence which allows the court to infer the reasons why a communication was made. It is not necessary that the party provide evidence in the form of an express statement such as “my only reason for obtaining this report was because I wished to provide it to counsel so that they could give me legal advice” as that would raise the bar beyond the standard of Grant v Downes.[7] However, the purpose for which the communication is made or a document is created cannot be proved by mere assertion and the use of the formulaic statement of “confidential communication … in connection with …” It must be verified on oath and proper particulars of the claim be provided.
[7](1976) 135 CLR 674.
48 In Barnes v Commissioner of Taxation[8], the Full Court of the Federal Court (Tamberlin, Stone and Siopsis JJ) observed, in respect of the evidence tendered before it (at [16]):
This affidavit falls far short of providing any adequate basis for claiming privilege in respect of any individual document. It consists of assertions, conclusions and generalised comments. The documents referred to are from a number of sources. The Further and Better Particulars of Statement of Claim furnished by the appellants refer to several different persons or entities who are said to have been originators of the documents. However, no evidence has been adduced from any of those persons. Most notable of all is the absence of any evidence from Mr Calder. In this context, the fact that Mr Barnes’ affidavit does not clarify the reason why any specific document came into existence means that the Court is left to consider the documents on their face and determine as best it can whether the documents are privileged. This is unsatisfactory.
[8](2007) 242 ALR 601.
49 In the context of production under subpoena, Justice Brereton in Hancock v Rinehard (Privilege)[9] at [7] held:
To sustain a claim of privilege, the claimant must not merely assert it; but must prove the facts that establish that it is properly made. Thus a mere sworn assertion that the documents are privileged does not suffice, because it is an inadmissible assertion of law; the claimant must set out the facts from which the court can see that the assertion is rightly made or in other words “expose … facts from which the [court] would have been able to make an informed decision as to whether the claim was supportable”. The evidence must reveal the relevant characteristics of each document in respect of which privilege is claimed, and must do so by admissible direct evidence, not hearsay.
[9][2016] NSWSC 12.
50 At [29], Justice Beach observed in that case that the claimant had the onus of establishing the claims:
… including each factual element necessary to establish the requisite dominant purpose. In that respect, focused and specific evidence is required in respect of each communication, rather than mere generalised assertion let alone opaque and repetitious verbal formulae. There should be sufficient evidence which proves directly or by inference that the dominant purpose for the communication was for the relevant client to be given or obtain legal advice.
51 The test to be applied to determine whether the documents in question were appropriately the subject of a claim for privilege was whether the dominant purpose of the relevant confidential communications, determined at the time they were made, was to give or receive legal advice.
52 The Owner submitted that the Architect was acting in his capacity as its agent for the purposes of the communications the subject of the application. As such, the documents fall within s118(a) of the Act. Any communication between a party and their professional legal adviser if it is confidential and made to or by the professional adviser in their 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.[10]
[10]Trade Practices Commission v Sterling (1979) 36 FLR 244 at [245-246].
53 A factual finding as to whether the communications were made between the Owner’s lawyer and the Architect in his role as the Owner’s agent or as an independent assessor, valuer or certifier under the Contract is a difficult one on the material before the court.
54 The evidence of Mr Abbott, the lawyer for the Owner, is that Colin Biggers & Paisley agreed to act for the Owner in relation to the matter and he was assigned as the responsible Partner. Since around that date, i.e. 28 April 2014, his firm has provided the Owner with legal advice in relation to the defects, the dispute with the Contractor, the parties’ rights and obligations under the Contract, and the Contractor’s correspondence and notices.
55 Mr Abbott deposes that, as part of providing legal advice, it has been necessary for Colin Biggers & Paisley to seek information and documents from the Architect. Due to the protracted nature of the process, this has required a large volume of correspondence. Conversely, during the process of arranging for rectification of the defects, the Architect has often requested advice from Colin Biggers & Paisley as to the Owner’s rights and obligations under the Contract.
56 Mr Abbott says that the correspondence passing between Colin Biggers & Paisley, the Owner and the Architect prior to the making of the claim to adjust the Contract (i.e. prior to 1 October 2020) was correspondence in which Colin Biggers & Paisley was either seeking instructions for the purpose of providing advice to the Owner, or providing advice to the Architect as the agent of the Owner.
57 In regards to the documents listed under para 1(a) of the Originating Motion, Mr Abbott deposes that all of the documents listed therein consist of documents created for the purpose of providing legal advice to the Owner. For example:
(a) document 1(a)(i) refers to “NA [Nathan Abbott] request for information”. That is a reference to a request which I made to the Architect on 4 April 2017, for information about the scope of the rectification work. … ; and
(b) document 1(a)(ii) refers to the “NOA LO2”. This is a reference to a communication from the Architect to me, responding to legal advice which I had provided and also responding to a request for information about the rectification works.
58 In regards to the documents listed under para 1(b) of the Originating Motion, all of the meetings and discussions referred to involve meetings and discussions with Mr Abbott and other lawyers from Colin Biggers & Paisley conducted for the purposes of Colin Biggers & Paisley providing legal advice to the Owner.
59 In regards to the documents described under para 1(c) of the Originating Motion, these invoices are not part of the Owner's claim to adjust the Contract. They contain entries which relate to communications between Colin Biggers & Paisley and the Architect created for the purpose of Colin Biggers & Paisley providing legal advice to the Owner.
60 The Contractor submits that the Owner’s asserted claim of privilege is not established on the evidence. Further, it is submitted that there is no evidence or sufficient evidence that the communication was expressed to be confidential or made in circumstances that imposed on the Architect any obligation not to disclose its contents.
61 In Kennedy v Wallace[11], the Full Federal Court stated that it is not sufficient for a party merely to assert a claim for privilege nor will an affidavit asserting the purpose for which a document was brought into existence followed by a statement about the category of legal professional privilege to which the document is said to belong necessarily be sufficient.
[11][2004] 142 FCR 185 at [13] per Black CJ and Emmett J.
62 The documents will be assessed individually by reference to the date, persons between whom the communication passes and purpose in order to ascertain privilege. It cannot be assessed without those details.
63 The proper way to describe the documents for which privilege is claimed is to list the documents and in respect of each document, to state the basis of the claim. In my view, the Owner’s approach in this case is sufficiently made by putting the documents into categories by reference to the Originating Motion and describing the document (e.g. email), a date provided, the author and recipient identified (from [solicitor] to [client’s agent]) and the purpose of the communication has been explained (e.g. providing legal advice in relation to the Contractor’s legal rights in respect of the Owner’s defective building work).
64 The onus has been discharged by evidence as to the circumstances and context in which the communications occurred or the documents were brought into existence, or by evidence as to the purposes of the person who made the communication, or authored the document, or procured its creation. Alternatively, the Owner has discharged the onus by reference to the nature of the documents, supported by affidavit, the table of objections, oral argument and written submissions.
65 Under a regime proposed by the Court, the documents the subject of the application were brought to Court by the Owner for the Court to inspect the documents, if needed, and to satisfy the Court whether the claim is properly asserted. The Owner invited the Court to inspect the documents. Having inspected the documents, I consider that the claim for privilege is properly made. Further, the anomaly in the dates identified by the Contractor in document 1(a)(i) arises from the email chain comprising that document.
66 Ground (b) is made out.
Third Ground waiver
67 If privilege is established then it can only be waived by the client with their consent. A waiver of privilege may be express or implied.
68 Section 122 of the Act focusses on the conduct of the claimant and whether their behaviour was inconsistent with the maintenance of the confidentiality between lawyer and client. The question of inconsistency depends ‘upon the circumstances of the case … questions of waiver are questions of fact and degree’.[12]
[12]Osland v Secretary to the Department of Justice (2008) 234 CLR 275 at [49].
69 The burden of proof in relation to waiver lies with the party who asserts that the privilege has been lost.
70 The Contractor submits that there has been issue waiver in the present case. Where a party pleads that they undertook certain action, for example, ‘in reliance on’ a particular representation made by another, they open up as an element of their cause of action, the issue of state of mind at the time that they undertook such action.
71 The court will be required to determine what was the factor, or factors, which influenced the mind of the party so as to induce him or her to act in that way. That is, the party puts in issue in the proceeding a matter which cannot fairly be assessed without examination of relevant legal advice, if any, received by that party. In such circumstances, the party, by putting in contest the issue of their reliance, is to be taken as having consented to the use of relevant privileged material or to have waived reliance on the privilege which such material would otherwise attract.[13]
[13]Commissioner of Taxation v Rio Tinto Ltd (2006) 151 FCR 341 at [24].
72 In order to establish that there has been an implied or imputed waiver:
(a) first, the Contractor must show that communications the subject of legal professional privilege contributed to or affected the relevant state of mind;[14] and
(b) second, the Contractor must show that it would be unfair for the Owner to withhold those communications from the Contractor.[15]
[14]ANZ Banking Group Ltd v ANZCover Insurance Pty Ltd [2005] VSC 21 at [7].
[15]Mann v Carnell [1999] 201 CLR 1 at [13].
73 In my view, there has been express waiver by the Owner of privilege by the relevant pleadings in the related proceeding. I accept the Contractor’s submissions that in pleading that the Architect issued a progress certificate pursuant to the Contract in which he recorded his assessment of the claim and certified a sum due and payable (paras 5(e) and 13), that allegation necessarily puts into issue whether the Progress Certificate issued was made pursuant to the Contract – and not in breach of it. I accept that there is an inconsistency between the making of the Owner’s claim and the maintenance of confidence in the communications surrounding the issue of the disputed Progress Certificate.
74 I accept, first, that in making this allegation in relation to the Progress Certificate in reliance of the provisions in the contract, the Owner has laid open to scrutiny the factual circumstances surrounding the issue of the disputed Progress Certificate, including the independence and impartiality of the Architect, and therefore the preceding communications between the Architect and the Owner (and its solicitors) which may have contributed or affected the Architect’s state of mind.
75 Second, consistent with the principles set out by Allsop J (as his Honour then was) in DSE (Holdings) Pty Ltd v Intertan Inc[16] and those identified by the majority in Mann v Carnell, I find that there is a forensic unfairness to the Contractor of allowing the Owner’s claim to proceed in the primary proceeding without disclosure of these communications.
[16](2003) 127 FCR 499 at [58].
76 Further, the Owner voluntarily produced to the Contractor the Architect’s invoices for the period April 2014 to May 2020. The Contractor submits that despite producing six years’ worth of Architect’s invoices, the Owner now seeks to assert a claim of legal professional privilege over the invoices from June 2020 to March 2021, being a critical period surrounding the Architect’s purported assessment and issue of the disputed Progress Certificate.
77 The Contractor contends that by voluntarily disclosing the Architect’s earlier invoices, the Owners acted inconsistently with maintaining privilege over those documents and the documents referred to therein (disclosure of which is reasonably necessary to enable a proper understanding of the invoices). It follows that any privilege that might have attached to the documents listed in paragraphs 1(a)-(c) of the Originating Motion has been lost for the purposes of ss 122 and 126 of the Act. I agree.
78 In addition, although it is unnecessary for me to determine the alternative claim of waiver any privilege found to attach to the documents in has been waived by the Owner through its voluntary disclosure of the Architect’s invoices which refer to these documents.
79 The Architect’s invoices voluntarily provided to Contract by the Owner were detailed form and disclose, either directly or indirectly, communications concerning matters that are protected by the privilege, including instructions given by the client to their solicitors, and the advice given.[17] The Architect’s invoices disclosed the nature and content of privileged material which has been waived by the Owner through the voluntary disclosure of the Architect’s invoices.
[17]Hodgson v Amcor Ltd [2011] VSC 204 at [62].
80 Accordingly, I uphold ground (c).
Conclusion
81 For the foregoing reasons, grounds (a), (b) and (c) have been made out. It was common ground that if the grounds are made out then the same relief flows in respect of all categories of documents sought in the Originating Motion. The Contractor’s application is therefore granted.
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Certificate
I certify that these 17 pages are a true copy of the judgment of Judge Burchell delivered on 12 July 20201.
Dated: 12 July 2021
Simon Bobko
Associate to Judge Burchell
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