FEOLI and DI BELLO

[2010] FCWA 67

JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA

ACT: FAMILY COURT ACT 1997

LOCATION: PERTH

CITATION: FEOLI and DI BELLO [2010] FCWA 67

CORAM: CRISFORD J

HEARD: 21 JUNE 2010

DELIVERED : 1 JULY 2010

FILE NO/S: PTW 4106 of 2004

BETWEEN: MR FEOLI

Applicant

AND

MS DI BELLO
Respondent

Catchwords:

Evidence - legal professional privilege - waiver

Legislation:

Family Court Act 1997

Category: Not Reportable

Representation:

Counsel:

Applicant: Ms A Payne

Respondent: Mr A Davies

Solicitors:

Applicant: Paynes

Respondent: O'Sullivan Davies

Case(s) referred to in judgment(s):

Alfasi and The Alfasi Group (2006) FLC 93-271

Argyle Brewery Pty Ltd v Darling Harbourside (1993) 120 ALR 537

Attorney-General for the Northern Territory v Maurice and Others (1986) 161 CLR 475

Australian Agricultural Company Ltd v AMP Life Ltd [2006] FCA 371

Gallo v Dawson (1990) 93 ALR 479

Macquarie Bank & B & B [2006] FamCA 1052

Mann v Carnell 201 CLR 1

McMahon & McMahon (1976) FLC 90-038

Sicpa North America Inc v Donaldson Enterprises Inc (1981) 430 A 2d 262.

Stamp and Stamp [2007] FamCA 420

Switchcorp Pty Ltd v Multiemedia Ltd [2005] VSC 425

Tormsen & Tormsen (1993) FLC 92-392

WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED

1 The Court is asked to determine issues of legal professional privilege in the context of property proceedings which are to be heard by this Court not before 26 July 2010.

2The issue to be determined at that hearing is whether the wife should be granted an extension of time to seek a review of the Consent Orders made by a Registrar of the Family Court of Western Australia on 16 August 2004. Her delay in seeking such a review is from September 2004 to December 2008.

3The application for an extension of time within which to review the orders is brought pursuant to s 33(8) of the Family Court Act 1997.

4Before dealing with the issue of legal professional privilege it is useful to briefly consider the legal principles relevant to the extending of time for a review. Although I am not called up to determine that issue now, it is useful to consider it as background to the present application.

5In essence, leave should be granted if it permits justice to be done between the parties. In this respect, the Court refers to the following passage of McHugh J in Gallo v Dawson (1990) 93 ALR 479 at 480:

“The grant of an extension of time under this rule is not automatic. The object of the rule is to ensure that those Rules which fix times for doing acts do not become instruments of injustice. The discretion to extend time is given for the sole purpose of enabling the court or justice to do justice between the parties: see Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257 AT 262.”

6However his Honour went on to further clarify this principle:

“This means that the discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time: see Avery v No 2 Public Service Appeal Board [1973] 2 NZLR 86 at 92; Jess v Scott (1986) 12 FCR 187 at 194-5; 70 ALR 185. When the application is for an extension of time in which to file an appeal, it is always necessary to consider the prospects of the applicant succeeding in the appeal: see Burns v Grigg [1967] VR 871 at 872, Hughes, at 263-4; Mitchelson v Mitchelson (1979) 24 ALR 522 at 524.”

7In Tormsen & Tormsen (1993) FLC 92-392, the Full Court stated that the fundamental issue in an application for an extension of periods of time prescribed by Rules of a court is whether this will enable a court to do justice between the parties. It went on to state that a court must weigh the right which the respondent to the application has to attain the benefit of the judgment and the desirability that there be finality of litigation. A failure to explain the delay adequately can certainly lead to a conclusion that justice demands that the application be dismissed. However, in appropriate cases, the interests of justice may outweigh the absence of an adequate explanation for the delay. In addition, in an application to extend time in which to appeal there must be a substantial issue to be raised on the appeal and no hardship or injustice caused to the respondent which cannot be compensated by orders for costs or otherwise McMahon & McMahon (1976) FLC 90-038.

8In Alfasi and The Alfasi Group (2006) FLC 93-271, Bryant CJ referred to the principles applicable to an application for leave to appeal out of time as discussed by McHugh J in Gallo v Dawson (1990) 93 ALR 479 at 480-81.

9The Chief Justice stated:

“Accordingly, the first and most important question to be determined upon such an application as this is whether the applicant has established that there is a substantial issue to be raised on appeal. If not, the application must fail. If so, then other considerations may become relevant to the exercise of the discretion, namely: the extent of the delay and the reasonableness of any explanations offered for it; any hardship or prejudice flowing to the respondent from the applicant’s delay which cannot be compensated for by orders as to costs or otherwise: and the desirability, in the public interest, that there be finality to litigation.”

10In my opinion, even bearing in mind the Court is not dealing with an appeal, these comments correctly set out the relevant legal principles to be considered in matters of this nature.

11The practical effect of extending the time within which to review the orders is that the consent of one of the parties to the orders is withdrawn. Thus, there are no orders and the matter is to be determined afresh by a judicial officer on the evidence before the Court at that time.

12I am mindful that there are other considerations relevant to the exercise of any discretion including the extent of the delay and the reasonableness of any explanation offered for it. There is also the hardship or prejudice flowing to the husband from the applicant’s delay and the desirability of finality to litigation.

Background facts to these proceedings

13On 2 June 2010 the husband issued subpoenas to Mr [N] of [Firm J] and [BB] Pty Ltd. The former seeks documents relating to the property settlement between the parties and the latter seeks all documents relating to a claim by the wife against her former solicitors, Firm J. The husband is seeking disclosure of these legal files from 9 September 2004 onwards.

14On 8 June 2010 an application in a case was filed by the husband seeking the wife’s present solicitors, O’Sullivan Davies, produce their file for inspection for the period June 2006 to April 2007.

15All three firms of solicitors rely upon legal professional privilege and oppose the production of their respective files.

16On 9 September 2004, less than 28 days after the orders were made, the wife spoke by telephone to her solicitor, [Mr K]. On the same day she received a letter by email confirming advice given to her.

17The letter of advice is annexed to the wife’s trial affidavit. It refers to the difficulties in varying or setting aside orders pursuant to s 79A of the Family Law Act 1975. It makes no mention of the provisions of s 33(8) of the Family Court Act and the automatic right of parties to seek a review of orders within a 28 day time frame.

18In June 2006 the wife made enquiries of O’Sullivan Davies, her current lawyers. On 10 April 2007 she instructed those lawyers to close their file. On 11 November 2008 O’Sullivan Davies were instructed to resume work on her case. On 30 December 2008 the current proceedings were commenced.

19In July 2009 the wife instructed [Mr B] to act against Firm J arising out of the orders of August 2004. Her claim arises from allegations of professional negligence by that firm. She says the firm had not given her advice about her rights under s 33(8) of the Act.

20Running in tandem with this time line the wife deposes she was treated for depression by a clinical psychologist starting in about July 1999 and continuing until about 2006.

21In February 2007 she attended an appointment with a consultant psychiatrist. She did not continue treatment with him. In April 2007 she instructed O’Sullivan Davies to close their file. In May 2007 she deposes to being distressed and having thoughts of suicide. She attended her general practitioner and was admitted to Perth Clinic. Thereafter, until December 2008, she attended a series of appointments with a consultant psychiatrist, [Dr F]. Dr F has sworn an affidavit for the purpose of the proceedings.

22The wife deposes that in 2004 and 2005 she had surgery to remove a growth (lipoma) and in December 2006 she underwent a radical hysterectomy.

23The wife also deposes that after the initial separation in January 2004 the parties continued to have a relationship although they did not live together on a full-time basis. The relationship finally ended in September 2006.

Discussion

24Pursuant to rule 13.20 of the Rules a party may object to the discovery of a document on the basis that it is privileged. This privilege can only be waived by a client, being the person entitled to claim it (Attorney-General for the Northern Territory v Maurice and Others (1986) 161 CLR 475).

25A litigant can waive privilege directly through intentionally disclosing protected material or a waiver of privilege can be imputed indirectly by conduct.

26Here there is no question the subject matter of the subpoena is privileged, rather the question is whether such privilege has been waived.

27As was stated by the majority of the Full Court of the Family Court in the decision of Stamp and Stamp [2007] FamCA 420, the High Court decision of Mann v Carnell 201 CLR 1 is currently the most significant authority on the issue of legal professional privilege and waiver.

28In Mann Gleeson CJ, Gaudron, Gummow and Callinan JJ said at paragraph [28]-[29], in relation to waiver of legal professional privilege:

“[28] At common law, a person who would otherwise be entitled to the benefit of legal professional privilege may waive the privilege. It has been observed that "waiver" is a vague term, used in many senses, and that it often requires further definition according to the context. Legal professional privilege exists to protect the confidentiality of communications between lawyer and client. It is the client who is entitled to the benefit of such confidentiality, and who may relinquish that entitlement. It is inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege. Examples include disclosure by a client of the client's version of a communication with a lawyer, which entitles the lawyer to give his or her account of the communication, or the institution of proceedings for professional negligence against a lawyer, in which the lawyer's evidence as to advice given to the client will be received.

[29] Waiver may be express or implied. Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. When an affirmative answer is given to such a question, it is sometimes said that waiver is "imputed by operation of law". This means that the law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the subjective intention of the party who has lost the privilege. Thus, in Benecke v National Australia Bank, the client was held to have waived privilege by giving evidence, in legal proceedings, concerning her instructions to a barrister in related proceedings, even though she apparently believed she could prevent the barrister from giving the barrister's version of those instructions. She did not subjectively intend to abandon the privilege. She may not even have turned her mind to the question. However, her intentional act was inconsistent with the maintenance of the confidentiality of the communication. What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large.” [footnotes omitted]

29The husband has sought to have access to the files of three different solicitors. Each has acted for the wife, although at different periods of time and for different purposes. It is convenient to deal with each solicitor’s file separately.

•Firm J

30In her trial affidavit the wife deposes to noting that on 23 August 2004, just a week or so after the consent orders had been made, the [City A] adopted an amendment to its town planning scheme and also adopted a local area structure plan. This amendment and structure plan applied to a property in [Suburb F] which was, pursuant to the orders, to be transferred solely to the husband. The amendment and plan had apparently been in the offing for some considerable time. In the application for consent orders the parties depose to the Suburb F property being valued at $900,000. In their oral submissions both parties refer to earlier affidavits filed in the proceedings. In an affidavit filed 4 March 2009 the wife deposes that in 2005 a subdivision of the Suburb F property into two lots was approved. The smaller of the two lots was sold on 19 August 2005 for $3.08m. The husband continues to be the sole registered proprietor of the larger lot which, at the time of swearing of her affidavit, the wife estimates to be valued at more than $6m.

31On 9 September 2004 the wife obtained the letter of advice from her solicitor. She says she relied upon the advice that there were limited, if any, grounds to seek to set aside the orders.

32The wife has chosen to disclose confidential legal advice received by her. The context of the disclosure is for the purpose, it appears, of explaining why she did not take action within the time frame set out in the legislation. Firstly, it seems the wife is asking the Court to draw the inference from the disclosure that she was never advised about her rights pursuant to s 33(8) of the Act and that the process outlined for her pursuant to s 79A of the Act was a difficult one in the circumstances, although the particular circumstances are not clearly set out in the letter.

33Her knowledge of her rights at that time is central to the issues the Court is to decide at trial. The wife has chosen to disclose the detail of the advice.

34In Macquarie Bank & B & B [2006] FamCA 1052, Le Poer Trench J refers to the decision of Cowdroy J in Australian Agricultural Company Ltd v AMP Life Ltd [2006] FCA 371. Cowdroy J had summarised the various authorities concerning inconsistency and waiver and had stated [34]:

“In my opinion, in order to waive privilege a party must assert a belief which is likely to have been, or is explicitly said to have been, materially dependent upon legal advice given to that party. In that case the proof or otherwise of the belief is dependent upon the legal advice and accordingly privilege is waived. This is the position in cases where the dispute relates to a party’s understanding of its legal position at a given point in time, such as Thomason, Rio Tinto, Ampolex and Fort Dodge.”

35His Honour then refers to the decision of Whelan J in Switchcorp Pty Ltd v Multiemedia Ltd [2005] VSC 425, where he set out “general propositions” in relation to waiver of legal professional privilege as follows:

“1.A statement which reveals the contents of legal advice, even if it does so in a summary way or by reference only to a conclusion, will, or probably will, result in a waiver.

2. A statement which refers to legal advice, even if it associates that advice with conduct undertaken or with a belief held by the client, will not, or probably will not, result in a waiver.”

36Here, the wife has revealed the content of one piece of legal advice. However, she has not disclosed the facts provided by her and upon which this legal advice was based. She has not provided any other associated communication with her lawyer about the issue. The disclosed letter does not necessarily paint the whole picture.

37In this respect I also refer to Argyle Brewery Pty Ltd v Darling Harbourside (1993) 120 ALR 537, where Beaumont J referred to the decision of Sicpa.

38Sicpa refers to a United States case: Sicpa North America Inc v Donaldson Enterprises Inc (1981) 430 A 2d 262). That case concerned the limited disclosure of information for the purpose of settlement. It was held:

“The result is the same where the client discloses, or consents to counsel's disclosure, of some of the privileged information where the purpose of such disclosure is to advance the client's own self-serving objectives. It makes no difference in such a situation that only a part of the privileged information is disclosed, as a partial waiver of a privileged communication effectively waives the entirety thereof ... A party cannot choose to disclose only so much of an allegedly privileged matter as is helpful to his case; once a party begins to disclose a confidential communication for a purpose outside the scope of the privilege, the privilege is lost ...”

39In this particular case I find the wife’s act of disclosing the communication of 9 September 2004 inconsistent with the maintenance of confidentiality of other documents which may exist and explain the surrounding circumstances of the letter including, but not limited to file notes or memoranda and notes of telephone calls.

40Insofar as the subpoena to Firm J is concerned I am satisfied the claim that legal professional privilege has been waived is made out. The documents sought are clearly relevant and are to be produced for inspection pursuant to the subpoena.

•BB Holdings Pty Ltd

41Mr B has raised the issue of legal professional privilege in relation to most of the content of its file. Some documents are not the subject of that claim and are available for inspection.

42On 10 August 2009 Mr B communicated with Firm J. This correspondence raises the failure by the wife’s solicitor to advise her of rights under s 33(8) of the Family Court Act.

43On 10 September 2009 Mr B corresponded with Law Mutual (WA). In a response to that correspondence Law Mutual (WA) on behalf of Firm J said it would not rely upon the Limitation Act if the wife did not commence Supreme Court proceedings against Firm J before 13 September 2012.

44I find the real question in relation to this file is that of its relevance. I am satisfied that communication between Firm J and the wife is relevant given the disclosure of the letter of 9 September 2004. I am not so satisfied that the entire content of the [BB file] should be the subject of inspection, at least at this stage as I am not persuaded of its relevance to the issues before this Court.

45The negligence claim is a discreet issue and from the information that is disclosed it appears unlikely to proceed until the Family Court issues are dealt with and an outcome known.

46Given I am not persuaded of the relevance of the content of the BB file, save and except as it contains the content of Firm J’s file relating to the consent orders, there is no need for me to go on and determine the issue of waiver of the privilege which certainly attaches to the file.

47I intend to adjourn this to the trial. If there is evidence that persuades me of its relevance, the matter can be re-agitated at that stage. I do not expect Mr B to attend the trial, but they will be advised if further submissions are required.

•O’Sullivan Davies

48This covers the period from June 2006 when O’Sullivan Davies were contacted by the wife through to April 2007 when she arranged for her file to be closed and then to 11 November 2008, when she re-instituted her instructions.

49The wife was admitted to Perth Clinic in May 2007. Dr F deposes she was in crisis, depressed and suicidal. He diagnosed her as having had a major depressive disorder for which she sought treatment from about 2001.

50When one reads the wife’s trial affidavit, coupled with the medical evidence of Dr F, it seems she proposes that her long standing depression has produced a difficulty, or perhaps even disability, such that she did not act in a timely fashion from at least 2006 onwards.

51Dr F deposes:

“22.[Ms Di Bello] told me in August 2007 that she would change back to her maiden name as she had thought this through and felt it was the clearest way that she could send a message to her daughters to say that she could no longer support what her marriage had been. So, it took at least until August 2007 for that progress to be made. The process of psychotherapy takes a great deal of time, and in my opinion the fact that it only took from May 2007 until November 2008 before she proceeded with giving her solicitors instructions is an indicator that she made substantial improvement in what was a relatively short period of time, given that she has had to go over, reflect and perhaps change very longstanding and strongly held beliefs which for the most part had been unconscious.”

52The wife’s trial affidavit gives a chronology or time frame about property matters which is interlaced with her psychological and even some physical difficulties.

53I am satisfied that she makes an issue about the extent to which these matters have affected her capacity to give instructions to her solicitors and how it has affected her ability to not only provide them with instructions, but to do so in a timely fashion. This points to the role played by her solicitors and any advice to and influence upon her.

54Although the wife’s affidavit is carefully drafted, no doubt to avoid raising the issue of legal professional privilege, I am satisfied that her mental capacity has been raised fairly and squarely. The timing of this and her obtaining legal advice becomes relevant not only for the fact of it, but how the advice impacted on her actions. It thus becomes inconsistent with the maintenance of her usual right to legal professional privilege.

55The reason for her delay in instituting these proceedings is one of the central issues in question. It is important to understand what legal advice she received and the part that played in her actions. I am satisfied that it would be inconsistent for her to raise such issues, yet claim privilege for the likely contents of communications between her and O’Sullivan Davies.

56In relation to O’Sullivan Davies’ file, up to and including the date she instituted proceedings, is to be produced for inspection.

Orders

57I will hear from counsel about the form of orders I intend to pronounce. Essentially, the husband will have liberty to inspect Firm J’s file from 9 September 2004 insofar as it relates to the consent orders and O’Sullivan Davies’ file from June 2006 until 30 December 2008.

58The issue in relating to BB’s file will be adjourned to trial. However, my view at this stage is that it is not relevant to the matters before the Court and is unlikely to be ordered to be produced.

I certify that the preceding [58] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court

Associate