Goldberg & Anor v Bernard Ng

[1995] HCATrans 18

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney           No S110 of 1994

B e t w e e n -

HAROLD JOHN GOLDBERG and YONA GOLDBERG

Applicants

and

BERNARD NG, HANGO HOLDINGS PTY LIMITED and CHERRY NG

Respondents

Application for special leave
to appeal

MASON CJ
BRENNAN J
TOOHEY J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 17 FEBRUARY 1995, AT 11.47 AM

Copyright in the High Court of Australia

MR M.L.D. EINFELD, QC:   If the Court pleases, I appear with MR W.G. MUDDLE for the applicants.  (instructed by Swaab & Associates)

MR G.C. LINDSAY, SC:   May it please the Court, I appear for the respondents.  (instructed by Freehill Hollingdale & Page)

MASON CJ:   Mr Einfeld.

MR EINFELD:   Your Honours, this Court has, in a number of cases with which your Honours will be well familiar, reinforced and recognised the notion that legal professional privilege is a fundamental common law right and in particular in a decision of this Court in Waterford v The Commonwealth 163 CLR 54 it was recognised, explicitly in the joint judgment of Justices Mason and Wilson and also in the judgment of Justice Brennan, that once the legal professional privilege was established, there was no further balancing exercise remaining to be performed between, on the one hand the public interest in the maintenance of the privilege, and on the other hand the public interest in the admission into evidence of relevant material.

In other words, the Court has now long recognised that there is no scope for discretionary notions of general fairness or unfairness in determining whether or not the privilege, once established, is exercisable.  However, the effect of the judgments below, if they are permitted to stand, is that the privilege may be removed in the name of waiver wherever the court feels that it would be unfair that the privilege be exercised.  Indeed, as we will show shortly, Justice Mahoney for one, having accepted the privilege was established, founded his decision essentially on what he himself described as a feeling that it would be unfair for the privilege to be maintained.

BRENNAN J:   It is not simply that that their Honours are saying, is it?  They are saying that a user of the privileged document in such a way as to procure an advantage for the person claiming the privilege against the person who is seeking discovery or production is a waiver of the privilege.

MR EINFELD:   Not, with respect, quite.  What their Honours said say, the privilege having been established, the use of the documents - let me accept for the moment to the advantage of the privilege claimer, I will come back to that because we submit it is misapplication of principle - but by reason of the use of that material for that advantage, it was unfair.  There was a general unfairness which gave rise, it was said by his Honour Justice Mahoney, to a feeling of unease or a feeling of unfairness of the use of the documents in the proceedings.

In our submission, that does not grapple with the real problem, or it is not an answer to the real problem.

BRENNAN J:   So stated, it could not be, but if their use is such that the allowing of the claim of privilege thereafter is unfair to the party against whom the document was used - or against whose interests the documents was used - what do you have to say to that?

MR EINFELD:   Only in one circumstance, and that is if the use is undertaken in the course of the proceedings.

BRENNAN J:   In the same proceedings?

MR EINFELD:   In the same proceedings.  That is what Maurice was all about.  There was a misapplication of Maurice principles both by the trial judge and by the judges in the majority in the Court of Appeal where all of their Honours adopted a proposition that Maurice stood for the notion that where any use, for that matter, of the privileged material, wherever it took place, gave rise to an advantage to the privilege claimant, then in such a circumstance general principles or doctrines of general fairness dictated that the privilege could be held to be waived in the actual proceedings.  Now, that is not what was held in Maurice at all by this Court.

TOOHEY J:   But we are concerned with waiver, are we not?

MR EINFELD:   Oh yes.

TOOHEY J:   It was just that some of your language perhaps suggested that the privilege itself - it was not clear whether the privilege was being qualified or that you are accepting the privilege but arguing whether in fact these circumstances give rise to waiver.

MR EINFELD:   That is precisely the point.  What I just indicated a moment ago was that if the judgments are permitted to stand, in our submission they will, in the name of waiver, under the guise of waiver, have the effect of removing the privilege - that is cutting down the privilege itself - which this Court has said, in effect, is a sacrosanct common law right, simply by application of what are described as general notions of fairness.

Can I expand on that slightly for a moment.  It is our submission there are really two questions that warrant leave and which arise directly from the majority judgment below.  The first is should the doctrine of imputed waiver, which is expounded in Attorney-General v Maurice be extended to the use of privileged information, privileged material, outside the proceedings in which the privilege is claimed, absent - and this is the primary answer to his Honour Justice Brennan’s question of me a moment ago - absent some prejudice in the other party’s conduct of these proceedings.

Can I restate that, your Honours?  We say the first leave question is should the doctrine of imputed waiver expounded in Maurice - and I will come to it in a moment - be extended to the use of privileged material outside the proceedings, as happened here, absent some prejudice in the other party’s conduct of those proceedings.  That is question one, because there was a unanimous finding in this case that there could be, and was, no suggestion that the other party’s conduct of the proceedings was in any way influenced or prejudiced by the production of the material by the solicitor to the Law Society.

BRENNAN J:   The other party’s conduct of which proceedings, the ones in which they have been used or the ones in which they are being sought?

MR EINFELD:   The privilege is being claimed.

BRENNAN J:   The ones in which the privilege is claimed?

MR EINFELD:   Yes.  In other words, Maurice stands for the proposition that if one uses or attempts to use privileged material in proceedings, and that causes some prejudice or, as in the joint judgment to which I will come in a moment it was suggested that creates an inaccurate perception as to the nature of the privileged material in the other party, so as to prejudice it in its conduct of the principal proceedings, then it was said there may be waiver; not in that case, but there might be waiver.

Maurice does not stands for a proposition that use of the material outside the proceedings, the principal proceedings, can give rise to a waiver of the privileged material in the proceedings.  Can I come to the passages in Maurice shortly.  May I be permitted to state what we say is the second proposition for which special leave is warranted, namely whether the principle of waiver for a limited and specific purpose only, as espoused by the Court of Appeal in England, ought be recognised as part of the law in this country.  They are the two questions which arose in the court below and the two questions which we say each warrant a grant of special leave.

Can I deal firstly with the Maurice considerations.  Your Honours, putting aside the question of intentional waiver altogether, we ask how can it ever be unfair in the conduct of proceedings for a party to exercise the privilege where, as here, there is no suggestion that the other party’s conduct of those proceedings has been influenced or prejudiced.  In our respectful submission, there is no authority cited.  There can never be a circumstance, as the law presently stands, save for the judgments below, in which use of privileged material outside civil proceedings or any court proceedings may be said to constitute a waiver in the absence of any material or any suggestion that the other party has suffered some prejudice or otherwise been influenced in its conduct of the proceedings.

BRENNAN J:   That rather conflates a couple of ideas, does it not?  Take the proceedings here before the Law Society and assume for the purpose - and I know that you will not accept this as a basic assumption and you will address on it in due course - but assume that you regard the complainant as a party to those proceedings.  Now, if one focuses on those proceedings and takes the document as being used by the present applicant for his benefit to the disadvantage of the complainant in those proceedings, there would have been a waiver in accordance with Maurice.

MR EINFELD:   In those proceedings, certainly.

BRENNAN J:   Right.  If the waiver had occurred in those proceedings, could it be reinstated in the present proceedings?

MR EINFELD:   Yes, certainly.

BRENNAN J:   What is the authority for that?

MR EINFELD:   The English cases are direct authority for that proposition.  In the Dennis Rye Case and in Downey v Murray, the case reported in the Northern Ireland Report, a decision of Justice Carswell in the Queens Bench Division, privileged documents, documents coming into existence for the conduct of proceedings A, if I may so call them, were provided to the authorities, police authorities, in the course of criminal proceedings which undoubtedly would have had the potential to be of advantage or benefit to the privilege holder or claimant, and more particularly, to the prejudice of the party seeking discovery of the documents.

TOOHEY J:   The advantage would not appear to be a consideration, would it, in the way that you put it?

MR EINFELD:   We submit it is not, but their Honours below said it was.

TOOHEY J:   Your proposition seems to amount to this, that waiver can only occur in the course of the proceedings to which the waiver is said to relate unless, in other proceedings or in other circumstances, the other party has suffered some detriment by reason of the waiver?

MR EINFELD:   No, with respect, we do not put that at all.  We say that the use of the privileged material outside the principal proceedings has nothing to do with the question of waiver of the claim for privilege in the principal proceedings.  It does not matter - in the English cases, for example, just by way of example, the privileged material was given to the police for the purpose of conducting criminal proceedings which would have rebounded, in answer to his Honour Justice Brennan’s question of me, to the disadvantage of the other party and the advantage perhaps of the claimant for privilege, and it was said that the production of those documents for that limited purpose, in one case with an undertaking as to confidentiality not present in the other, then in those circumstances, notwithstanding the production of the material and their use in the other proceedings, even to the prejudice of the non-claiming privilege party ‑ ‑ ‑

TOOHEY J:   So yours is an absolute proposition, is it, that waiver can only occur within the context of the proceedings to which it relates.

MR EINFELD:   Yes.  And so much is clear from the passages in Maurice itself.  And may I add, to add to your Honour’s proposition to me, and then only where the party seeking to inspect the documents would otherwise suffer some prejudice or disadvantage by reason of the use outside of the proceedings.  See, there will always be a disadvantage in one party not being able to inspect privileged documents in those proceedings in every single case of a claim for privilege, one can assume.  That has got nothing to do with it.  That is why advantage is irrelevant.  Can I just pass quickly to the judgment in Maurice 161 CLR 475.  Can I start with, although it is not the first and I mean no disrespect to the Chief Justice, with the joint judgment of Justice Mason and Brennan and just to quote one passage of it.  At the very top of page 488 their Honours say:

The holder of the privilege should not be able to abuse it by using it to create an inaccurate perception of the protected communication. 

Passing by the passage from Wigmore:

In order to ensure that the opposing litigant is not misled by an inaccurate perception.....fairness will usually require that waiver as to one part of a protected communication should result in waiver as to the rest -

You will notice the words “inaccurate perception of the protected communication”.  I will go back:

The holder.....should not be able to abuse it by using it to create an inaccurate perception of the protected communication.

That is in the proceedings.  Now, we have never sought to use these draft briefs to counsel and draft proofs of evidence which we gave to our own solicitor for the purpose of preparation of the civil litigation in the proceedings, nor could we.

MASON CJ:   But I do not see how you can use Maurice to support you, because Maurice was only concerned with use in the particular proceedings.

MR EINFELD:   With respect, your Honour in a sense is quite right.  It has been used against us, and is used against us ‑ ‑ ‑

MASON CJ:   It may be improperly used against you, in the sense that it may not bear upon the question at all, but I do not see how you get support.

MR EINFELD:   With respect, whatever statements are made in Maurice touching the question of use of material, it is confined to, because of the factual context, use in the proceedings.  And the case does not stand, as it has been ‑ ‑ ‑

MASON CJ:   I follow that.

MR EINFELD:    ‑ ‑ ‑not only put against us and here in the written submissions, but adopted by the majority below.  Both Mr Justice Mahoney and Mr Justice Clarke apply Maurice directly as authority for the proposition that there are general notions of fairness which will impact upon the question of whether waiver will be lost in proceedings, notwithstanding, (a) the use by the solicitor of the material takes place outside the proceedings, (b) gives rise to no prejudice or other disadvantage in the conduct of the proceedings.  Now, to the extent those judgments extend the present law, we submit that the matter is one quite appropriate and suitable for leave.

Your Honours, as I say, in direct contrast to Maurice invoked by the judges in the majority below, here there has not only been no prejudice but not even any use or any attempt to use our own privileged documents in the proceedings.  And one understands why there will be waiver where there is an attempt by a privilege holder to use part or some of the material in the proceedings to gain some advantage.  Then, as was said in Maurice, as would be appropriately said in many cases, it would be unfair for the privilege to be maintained.  But no authority has yet gone as far as the majority in the court below have done.

Now, your Honours, may I just deal quickly with the second point, that is the limited waiver point.  In the three United Kingdom cases there was a provision of the material, so an intentional act as will always be the case, even with imputed waiver, but for a very limited purpose.  In two of the cases, to assist the police in their conduct of criminal proceedings, we say analogously, in answer to what your Honour Justice Brennan put to me before, analogously with the Law Society’s investigation.  I hesitate with your Honours formulation to me earlier because it is not even a proceeding.  It was a mere investigation.

BRENNAN J:   Yes, I understood that that was ‑ ‑ ‑

MR EINFELD:   And the documents were produced in answer to an express request and we said we would produce them, the solicitor said he would produce them, provided they were kept confidential and the undertaking as to confidentiality was given.  So there was a very limited purpose or utility intended.  No evidence, by the way, at all, despite what Justice Mahoney said, that the solicitor was attempting to gain some advantage.  The evidence is set out in the judgments and the officer of the Law Society said, “Can I have those documents?”  The solicitor said, “They’re privileged.  I would only give them to you if I keep my confidentiality and you undertake not to show them to anybody else.” and the officer said, “I give you that undertaking”, and they were handed over.  So there is not attempt to gain any advantage.

Now, having said that, in Goldman v Hesper, one of the three English cases the passages in which are dealt with by the President in the minority, what happened was that documents were produced for taxation in the course of a taxation and it was held by the Court of Appeal that the provision of the documents for taxation purposes did not amount to a waiver of the privilege for the purposes of the proceedings as a whole.  They were still going.  The appellate steps were still in train.  If one posits, for example, a more commonly occurring feature of modern litigation, that a judge orders the taxation of costs during the course of proceedings, one asks the question, if the party claiming to have the fees allowed produced a document to the taxing officer but on condition that they not be shown to the other party, there is authority to say, well, the taxing officer perhaps may have to produce them to the other party.  But that would not constitute a waiver in the proceedings proper once the trial resumed, because they were for a very limited particular purpose, namely the taxation of costs.

Now, that question has not been decided, and it alone would warrant leave, in our submission.  That is the very question of whether the English doctrine, applied now twice by the Court of Appeal and subsequently in the Queens Bench Division, really does or ought form part of the law of Australia.  There is no authority, your Honours, in Australia, other than in the judgment of the President below, which we respectfully adopt, that says the English cases are correct and ought be applied.

I notice that the light is on.

MASON CJ:   I think you may as well resume your seat now that the light has shown and we will hear from Mr Lindsay.

MR LINDSAY:   Your Honours, I would hand up, if I may, a short outline of the submissions I would seek to make.

MASON CJ:   Thank you.  I am at a loss to understand how you get so much support from Maurice because, as I read Maurice, it was directed to unfairness in the context of the particular proceedings.

MR LINDSAY:   Your Honour, the statements of principle in Maurice are not so limited.

MASON CJ:   But the statements of principle always have to be read in the context of the particular issue to which the judgments are directing their attention.

MR LINDSAY:   Your Honours, the case at hand is a case where the privileged documents were used to the advantage of the privilege holder and against the clients and that privilege was then sought to be maintained.  In our submission, that is precisely what occurred in Maurice.  But the question of whether the disclosure and then the claim of privilege have to occur in the same proceedings, in our submission, does not flow from Maurice and, indeed, it is difficult to see what practical application can be given to that sort of principle.

Mr Justice Kirby, in his dissent, on this particular point himself dealt with the matter on the basis that it involved questions of fact and degree and he concluded that the Law Society proceedings, if I can call them that, and the Supreme Court proceedings were not sufficiently related.  However, in my submission, the majority judges were entitled to make that finding as a finding of fact and they did so.  The subject matter of the dispute was the same, precisely the same.  The effect of the production of documents to the Law Society conditionally was twofold:  what it did was to curtail a Law Society investigation which, in the ordinary course, the clients would have had the benefit of and then it, if successfully claimed, prevented the disclosure to the clients of documents which were used against them in the Law Society proceedings, documents which would have ordinarily been required to be produced on discovery.  So, in our submission, the principles applied or stated in Maurice have equal application here.

The question of waiver in this context is one of imputation of law.  The submissions that are put forward by the applicants boil down to a contention that a privilege holder can, by an exercise of individual will, limit a waiver, irrespective of whether, in the circumstances such as those considered by Maurice, it might be held as objectively unfair and properly the subject of a waiver.

BRENNAN J:   Mr Lindsay, I notice in your paragraph 3 you advance the proposition based on the judgment of Justice Deane in Maurice that:

It is a flexible test which imports ordinary notions of fairness.

Now, I have not looked at what Justice Deane said in the pages that you have referred to, but do I take it that your submission is that it is for the court simply to form a value judgment as to whether it is fair to allow the claim to be made and allowed.

MR LINDSAY:   It is not a personal value judgment; it is a matter of a judicial application of the concept of fairness.  But there is nothing technical about it.  Indeed, that is where we get the similarity between this case and what happened in Maurice, namely there was a use of privileged material against the clients to the advantage of the privilege holder, to the disadvantage of the other, followed by an assertion of the privilege and, in that sense, there is nothing exceptional about this case.

BRENNAN J:   So it is not limited to fairness in the sense of the obtaining of an unfair advantage in the litigation?

MR LINDSAY:   Those would be factors which would be taken into account, in my submission.

BRENNAN J:   Of course, but not limited to.

MR LINDSAY:   Not limited, that is right.

BRENNAN J:   Is that not, in itself, an important question?

MR LINDSAY:   Ultimately, in my submission, it depends on whether Maurice ought to be reviewed generally, because we say Maurice has been applied and that is the view that has been taken below.  We cannot deny, however, that the case might provide an opportunity to

review at least some of the principles or the application of Maurice.

BRENNAN J:   The proposition you advance in paragraph 4, that is that the imputation of waiver can be affected by notions of conditional waiver.  Is that not also an important question?

MR LINDSAY:   We submit that it is covered by Maurice and that that is really the starting point and the ending point, so far as our submissions are concerned.  What my friend’s submissions really attempt to do is to go beyond what we submit Maurice properly decides.  It is a question whether that ought to be considered.  This case provides, at least, the opportunity to consider that.  We would submit that it is not appropriate or necessary for it to be reviewed.

BRENNAN J:   Thank you.

MR LINDSAY:   Your Honours, we submit that the case really does not warrant a grant of special leave but essentially I have covered the points and I will leave it at that.

MASON CJ:   Thank you, Mr Lindsay.  The Court need not trouble you in reply, Mr Einfeld.  There will be a grant of special leave to appeal in this matter.

AT 12.15 PM THE MATTER WAS CONCLUDED