Cottage Holdings Pty Ltd v Town of East Fremantle
[1999] WASC 215
COTTAGE HOLDINGS PTY LTD -v- TOWN OF EAST FREMANTLE & ANOR [1999] WASC 215
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [1999] WASC 215 | |
| Case No: | CIV:2173/1998 | 21 OCTOBER 1999 | |
| Coram: | MASTER BREDMEYER | 5/11/99 | |
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| PDF Version |
| Parties: | COTTAGE HOLDINGS PTY LTD TOWN OF EAST FREMANTLE MCLEOD & CO (A FIRM) |
Catchwords: | Discovery Legal professional privilege Implied waiver of privilege |
Legislation: | Rules of the Supreme Court, O 26 r 9, r 12 |
Case References: | Attorney-General (NT) v Maurice (1986) 161 CLR 475 Balabell & Anor v Air India [1988] 1 Ch 317 Goldberg v Ng (1996) 185 CLR 83 Grant v Downes (1976) 135 CLR 674 Great Atlantic Insurance Co v Home Insurance Co (1981) 1 WLR 529 Lillicrap & Anor v Nalder & Son (A firm) (1993) 1 WLR 94 Telstra Corporation Ltd & Anor v BT Australasia Pty Ltd & Anor (1998) 156 ALR 634 Benecke v National Australia Bank (1993) 35 NSWLR 110 Commercial Developments Pty Ltd v Mercantile Mutual Insurance (Workers' Compensation) Ltd (1991) 5 WAR 208 Kelly v Commonwealth of Australia (1980) 29 ACTR 11 Wardrope v Dunne [1966] 1 Qd R 224 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
TOWN OF EAST FREMANTLE
Defendant
MCLEOD & CO (A FIRM)
Third Party
Catchwords:
Discovery - Legal professional privilege - Implied waiver of privilege
Legislation:
Rules of the Supreme Court, O 26 r 9, r 12
Result:
Application dismissed
(Page 2)
Representation:
Counsel:
Plaintiff : Mr C B Edmonds & Mr M K Benter
Defendant : Mr D S Gare
Third Party : No appearance
Solicitors:
Plaintiff : Jackson McDonald
Defendant : Minter Ellison
Third Party : No appearance
Case(s) referred to in judgment(s):
Attorney-General (NT) v Maurice (1986) 161 CLR 475
Balabell & Anor v Air India [1988] 1 Ch 317
Goldberg v Ng (1996) 185 CLR 83
Grant v Downes (1976) 135 CLR 674
Great Atlantic Insurance Co v Home Insurance Co (1981) 1 WLR 529
Lillicrap & Anor v Nalder & Son (A firm) (1993) 1 WLR 94
Telstra Corporation Ltd & Anor v BT Australasia Pty Ltd & Anor (1998) 156 ALR 634
Case(s) also cited:
Benecke v National Australia Bank (1993) 35 NSWLR 110
Commercial Developments Pty Ltd v Mercantile Mutual Insurance (Workers' Compensation) Ltd (1991) 5 WAR 208
Kelly v Commonwealth of Australia (1980) 29 ACTR 11
Wardrope v Dunne [1966] 1 Qd R 224
(Page 3)
1 MASTER BREDMEYER: This is an application by the plaintiff under O 26 r 9 and r 12 of the Rules of the Supreme Court for inspection of certain documents discovered by the defendant for which legal professional privilege is claimed. The chamber summons sought discovery of documents numbered 3-85 alternatively 3-53 and 79-85 in Pt 2 of the first schedule of the defendant's list of documents. Since then certain concessions have been made. By a letter dated 22 September 1999 from the defendant's solicitors their client agreed to disclose documents 3-5 and 79-83. They point out that documents 3, 4 and 5 are in fact the same as documents 79, 80 and 81. By a letter dated 21 October 1999 the defendant's solicitors have agreed to waive privilege in connection with documents 12, 13, 14, 15, 17, 19 (without the attached diagram), 20, 22, 25, 30, 31, 33, 36, 37 and 57.
2 Legal professional privilege can be claimed for those documents which are brought into existence for the sole purpose of submission to legal advisers for advice or for use in legal proceedings. A document which would in any event have been brought into existence for another purpose is not privileged from production after discovery on that ground. Grant v Downes (1976) 135 CLR 674 at 688. I quote from page 685 of that judgment:
"The rationale of this head of privilege, according to traditional doctrine, is that it promotes the public interest because it assists and enhances the administration of justice by facilitating the representation of clients by legal advisers, the law being a complex and complicated discipline. This it does by keeping secret their communications, thereby inducing the client to retain the solicitor and seek his advice and encouraging the client to make a full and frank disclosure of the relevant circumstances, to the extent to which it is accorded, the paramountcy of this public interest over a more general public interest, that which requires that in the interests of a fair trial litigation should be conducted on the footing that all relevant documentary evidence is available."
3 The plaintiff's first argument is that the waiver of privilege in relation to those documents mentioned above implies a waiver of privilege in relation to connected documents. For this proposition the plaintiff relies firstly on Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 487-8. I quote from the judgment of Mason and Brennan JJ:
(Page 4)
- "The limiting effect of legal professional privilege on the availability of evidence otherwise relevant is confined, inter alia, by the doctrine of waiver. A litigant can of course waive his privilege directly through intentionally disclosing protected material. He can also lose that protection through a waiver by implication. An implied waiver occurs when, by reason of some conduct on the privilege holder's part, it becomes unfair to maintain the privilege. The holder of the privilege should not be able to abuse it by using it to create an inaccurate perception of the protected communication. Professor Wigmore explains:
'[W]hen his conduct touches a certain point of disclosure, fairness requires that his privilege shall cease whether he intended that result or not. He cannot be allowed, after disclosing as much as he pleases, to withhold the remainder.' (Wigmore, Evidence in Trials at Common Law (1961), vol 8, par 2327, p 636.)
In order to ensure that the opposing litigant is not misled by an inaccurate perception of the disclosed communication, fairness will usually require that waiver as to one part of a protected communication should result in waiver as to the rest of the communication on that subject-matter: see Great Atlantic Insurance Co v Home Insurance Co [1981] 1 WLR 529; [1981] 2 All ER 485."
4 The second case relied on by the plaintiff is Great Atlantic Insurance Co v Home Insurance Co (1981) 1 WLR 529 a decision of Templeman and Dunn LJJ of the Court of Appeal. In that case when preparing documents for trial the plaintiffs solicitors disclosed a document which comprised the first two paragraphs of a memorandum sent to the plaintiffs by American attorneys in their capacity as legal advisers to the plaintiffs. The solicitors regarded the remainder of the memorandum as privileged but failed to make it clear that the memorandum contained additional matter in respect of which privilege was claimed. In opening the trial counsel for the plaintiffs read the document to the Judge unaware that it was incomplete and without any intention of waiving any privilege. When later on in the trial it emerged that the document did not represent the whole of the memorandum the third defendants applied for disclosure of the additional matter. That was on the fourteenth day of the trial. The Judge ordered the plaintiffs to disclose the whole of the memorandum. The trial Judge's decision was affirmed on appeal. The Court of Appeal held that the memorandum dealt with a single subject matter and so was
(Page 5)
- not capable of being divided into two separate and distinct memoranda, and that accordingly, privilege could not be waived as to part and asserted as to the remainder. The deliberate introduction by the plaintiffs' counsel of part of the memorandum into the trial record effectively waived privilege with regard to the whole memorandum and that there was no discretion by which the Court could restore and enable the plaintiffs to assert privilege in respect of the whole or part of the memorandum.
5 The third case relied on by the plaintiff is Goldberg v Ng (1996) 185 CLR 83 at 95-97. That case affirmed the views of the High Court in Attorney-General v Maurice(supra).
6 I have inspected the documents for which privilege is claimed as I am entitled to do under O 26 r 10. Having done so I do not consider that any of them are so related to the documents which precede and follow them, and for which privilege is claimed, that fairness requires that those other documents be disclosed also. I do not consider that any of the disclosed documents produce an unfair picture which could be rectified if surrounding documents, for which privilege is claimed, were revealed.
7 The plaintiff's second argument is that the defendant has waived its legal professional privilege by issuing third party proceedings against its solicitors, McLeod & Co. The plaintiff's main allegation against the defendant is pleaded in par 22 of its amended statement of claim and it is that in or about mid-August 1995 and prior of the signing of the deed by the plaintiff, the defendant by Geoffrey Owen, an employee of McLeod & Co, orally represented to the plaintiff in effect that as Lot 13 had not yet been subdivided the caveat would as a matter of convenience be lodged over the whole of Lot 13 and upon Lot 13 being subdivided, the caveat would be lifted from Lot 13 and lodged against the proposed Lot 16. That representation was made orally on two occasions by Mr Owen. The claim is for negligence and misleading and deceptive conduct.
8 The defendant in its defence denies making that representation and its third party statement of claim against its solicitors states in par 11, and here I summarise, that, if it is held by the Court that the defendant made that representation, then the third party is guilty of negligence because it made that representation without obtaining the advice or instructions of the defendant.
9 The third party proceedings are brought by the defendant against its solicitors in negligence. Clearly in that proceeding no legal professional privilege can be claimed by the defendant. See Lillicrap & Anor v
(Page 6)
- Nalder & Son (A firm) (1993) 1 WLR 94 a decision of the English Court of Appeal. See also Telstra Corporation Ltd & Anor v BT Australasia Pty Ltd & Anor (1998) 156 ALR 634 a decision of the Federal Court of Appeal at 645.
10 Registrar Powell on 15 June 1999 made certain directions in the third party proceedings and I quote from two of them:
"5. The third party be at liberty to appear at the trial of this action and take such part as the Judge shall direct, and be bound by the result of the trial.
6. The question of the liability of the third party to indemnify or make contribution to defendant be tried at or immediately after the trial of this action, as the Judge may direct."
11 I do not consider that the issuing of the third party proceedings in the light of those directions amounts to a waiver by the defendant of its right to claim legal professional privilege. If the trial Judge ordered that the trial of the third party action should take place at the same time as the trial of the main action, then I consider the defendant would have waived its legal professional privilege and the documents for which inspection is now sought would be admissible in both trials. But in the absence of such an order from the trial Judge, I do not consider it is unfair or improper for the defendant to maintain privilege in the main action, although it will not be able to do so in the third party action.
12 The plaintiff's third argument for lifting the privilege is that its says the defendant by its pleading has put its state of mind in issue and that being the case it is necessary to know what legal advice it received. For that proposition the plaintiff relies on the Telstra (supra) decision. In that case at 645-646 the majority Branson and Lehane JJ said:
"At common law it has also been held, in cases in which the state of mind of a party was in issue in the proceedings, that evidence could be called to establish the terms of legal advice, relevant to that party's state of mind, provided to that party. Thus, in Thomason v Campbelltown Municipal Council (1939) 39 SR (NSW) 347, where it was necessary for the defendant to prove what knowledge the plaintiff had as to her legal rights, Jordan CJ held that privilege could not be invoked to prevent proof of relevant legal advice provided to her.
(Page 7)
- In Hongkong Bank of Australia Ltd v Murphy [1993] 2 VR 419 Smith J held that, in raising and persisting with issues which concerned legal advice it received, Hongkong Bank was to be treated as having waived the privilege in respect of such advice. His Honour (at 439) said:
In this case, if the plaintiff is permitted to rely on a claim for privilege for the documents in question, the fact-finding task of the court will be seriously compromised. There is a real possibility of the court being misled.
In Pickering v Edmunds (1994) 63 SASR 357 Duggan J held that where, by their pleadings, the plaintiffs put in issue their state of mind and knowledge of the legal effect of a deed, evidence could be led as to relevant legal advice received by them. His Honour (at 362) said:
In the present case the conduct of the respondents is such as to make the issue of their appreciation of the legality or otherwise of the trust deed of crucial importance in the case. An effective trial on that issue could not take place in the absence of evidence as to what legal advice they received on the matter. Furthermore the appellants would be unfairly deprived of the opportunity to put material before the court on this key issue. It is true that the respondents did not raise directly the legal advice they received. However, they did put in issue their understanding of the legal effect of the earlier deed based on information they had received."
14 In Hongkong Bank of Australia v Murphy (supra) communications between the plaintiff and its solicitors were directly in issue on the pleadings. They were central to the plaintiff's claim and defence to counter-claim. In my view that is not so in the case before me.
(Page 8)
15 In Pickering v Edmunds (supra) the plaintiffs pleaded that they entered into the agreement as a result of threats by the defendants and a representation by the defendants that an earlier deed was illegal and unenforceable. The defendants pleaded that the plaintiffs got independent legal advice before signing the agreement, and that was admitted by the plaintiffs in their reply. It was held that the advice was not privileged. That is not the situation in the case before me. There is no admission or plea that the defendant got legal advice on the plaintiff's reliance on the representation.
16 Paragraph 22 of the amended statement of claim, which I have mentioned, is the alleged representation by Mr Owen to the plaintiff. Paragraph 23 pleads, in summary, that at the time of making the representation the defendant knew, directly or by its solicitors, McLeod & Co, or ought to have known, that the plaintiff would rely on the representations. That plea is denied by the defendant in its defence so the plea is in issue. I want to concentrate on the words "the defendant knew … that the plaintiff would rely on the representations". No particulars of that knowledge are given. Contrast that with the alternative plea that "the defendant … ought to have known that the plaintiff would rely on the representations". Three particulars of that are given. I do not consider that the plea that "the defendant knew … that the plaintiff would rely on the representations", is put squarely in issue by this pleading because of its lack of particulars. I consider that the pleading does not warrant a lifting of the defendant's legal professional privilege to see if the solicitors told the defendant that the plaintiff would rely on the representations. If I be wrong in that, I advise that I have inspected the letters in issue and none advise the defendant of this or, for that matter, of the representation.
17 I cited Grant v Downes (supra) to the effect that legal professional privilege is confined to those documents which are brought into existence for the sole purpose of submission to legal advisers for advice or for use in legal proceedings. I am concerned here with the former kind of document, brought into existence for the sole purpose of submission to legal advisers for advice. That covers requests for legal advice and that advice. Does that cover documents brought into existence between a client and its solicitor on a conveyancing matter? This question was examined by the Court of Appeal in England in Balabell & Anor v Air India[1988] 1 Ch 317. In that case Lord Donaldson MR and Parker LJ agreed with the judgment of Taylor LJ who at 330 said:
"Although originally confined to advice regarding litigation, the privilege was extended to non-litigious business. Nevertheless,
(Page 9)
- despite that extension, the purpose and scope of the privilege is still to enable legal advice to be sought and given in confidence. In my judgment, therefore, the test is whether the communication or other document was made confidentially for the purposes of legal advice. Those purposes have to be construed broadly. Privilege obviously attaches to a document conveying legal advice from solicitor to client and to a specific request from the client for such advice. But it does not follow that all other communications between them lack privilege. In most solicitor and client relationships, especially where a transaction involves protracted dealings, advice may be required or appropriate on matters great or small at various stages. There will be a continuum of communication and meetings between the solicitor and client. The negotiations for a lease such as occurred in the present case are only one example. Where information is passed by the solicitor or client to the other as part of the continuum aiming to keep both informed so that advice may be sought and given as required, privilege will attach. A letter from a client containing information may end with such words as 'please advise me what I should do'. But, even if it does not, there will usually be implied in the relationship and overall expectation the solicitor will at each stage, whether asked specifically or not, tender appropriate advice. Moreover, legal advice is not confined to telling the client the law, it must include advice as to what should prudently and sensibly be done in the relevant legal context."
18 Accepting that statement of the law as apposite in this jurisdiction I consider that all the documents in dispute fall within those expanded categories.
19 The plaintiff's application will be dismissed.
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