Habermann v Cook Shire Council

[2021] QSC 101

SUPREME COURT OF QUEENSLAND

CITATION:

Habermann v Cook Shire Council [2021] QSC 101

PARTIES:

ELLANNA STORM HABERMANN

(applicant)

v

COOK SHIRE COUNCIL

(respondent)

FILE NO/S:

290 of 2020

DIVISION:

Trial

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court of Queensland at Cairns

DELIVERED ON:

14 May 2021

DELIVERED AT:

Cairns

HEARING DATE:

7 May 2021, supplementary submissions received 11, 12 May 2021

JUDGE:

Henry J

ORDER:

1.   Application dismissed.

2.   I will hear the parties as to costs, if costs have not been agreed in the meantime, at 10.00 am on 21 May 2021 (out of town parties having leave to appear by telephone or video-link).

CATCHWORDS:

CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – MOTIONS, INTERLOCUTORY APPLICATIONS AND OTHER PRE-TRIAL MATTERS – OTHER MATTERS – DISCLOSURE – where the applicant plaintiff claims damages for personal injuries allegedly caused by the negligence of her employer, the respondent defendant – where in correspondence with the applicant the respondent’s solicitors disclosed the effect of legal advice given by the respondent’s counsel – where the correspondence was endorsed with the heading “Without Prejudice, Save as to Costs’” –  whether legal professional privilege was waived –whether disclosure of the advice by the respondent’s counsel is supported by “special circumstances and the interests of justice require it” – whether the court should order disclosure

Uniform Civil Procedure Rules 1999 (Qld), r 211, r 223

Attorney-General (NT) v Maurice (1986) 161 CLR 475, cited
Bennett v Chief Executive Officer, Australian Customs Service (2004) 140 FCR 101, not followed
Field v Commissioner for Railways for NSW (1957) 99 CLR 285, cited
Mann v Carnell (1999) 201 CLR 1, cited
Osland v Secretary, Department of Justice (2008) 234 CLR 275, followed
Pihiga v Roche [2011] 278 ALR 209, cited
Secretary, Department of Justice v Osland (2007) 95 ALD 380, followed

Unilever plc v Procter & Gamble Co [2001] 1 All ER 783, cited

COUNSEL:

J Greggery QC for the applicant plaintiff

R Morton for the respondent defendant

SOLICITORS:

Organic Legal for the applicant plaintiff

Jensen McConaghy for the respondent defendant

1. The applicant plaintiff claims damages for personal injuries allegedly caused by the negligence of her employer, the respondent defendant. A disclosure dispute has arisen between the parties, prompting the present application that the Court order disclosure of certain documents pursuant to r 223 Uniform Civil Procedure Rules 1999 (Qld) (UCPR).

2. By the time of the application’s hearing the sole issue was whether this Court should order the disclosure by the respondent to the applicant of an advice by the respondent’s counsel in respect of which legal professional privilege has allegedly been waived.

   Background

3. The alleged waiver of the privilege occurred against a background where, by letter of 3 November 2020 to the respondent’s solicitors, the applicant’s solicitors nominated pursuant to r 553 UCPR a day, time and place for the holding of a conference by mediation.

4. The response of the respondent’s solicitors, dated 11 November 2020, explained:

   “As set out in our correspondence of 2 October 2020, we have recently briefed Counsel and we also await receipt of further material from the Defendant.

   We otherwise confirm that we are seeking instructions from our client with respect to whether it is agreeable to proceeding to mediation as proposed.

   We shall revert to you in due course.”

5. Then on 20 November 2020 the respondent’s solicitors sent the applicant’s solicitors a further letter endorsed in bold print in its heading:

   “‘Without Prejudice, Save as to Costs’”

   The body of the letter was as follows:

   “We refer to your correspondence of 3 November 2020 and our correspondence of 11 November 2020 regarding the proposed mediation.

   We have now received advices from Richard Morton of Counsel.  Based on that advice, (which is consistent with our views of this claim) the Plaintiff is unlikely to establish that the Defendant is liable for her alleged psychiatric injury and even in the unlikely event that liability was established, quantum would not be awarded in the magnitude sought by your client.

   LGW has made its “best offer” and will not make any further offers at a mediation.

   [Redacted section, which it is common ground contained the terms of a settlement offer]

   Finally, in any event, we are not available for a mediation on Friday, 18 December 2020 in Townsville before Mr Philp QC.”

6. The effect of the second paragraph in the above passage was to disclose the respondent’s counsel had given legal advice that the plaintiff would be unlikely to establish the defendant is liable for the alleged psychiatric injury and in the unlikely event liability was established, the quantum which would be awarded would not be of the magnitude sought by the plaintiff.  At the highest it was a disclosure, in sparse terms, of the conclusions, not the reasons, in counsel’s advice.

7. By so disclosing the effect of counsel’s advice, it is alleged the respondent has waived its legal professional privilege in respect of that advice and that this Court should order the disclosure of counsel’s advice.  The respondent argues the applicant ought be precluded from relying upon the letter of 20 November 2020 because it was endorsed “without prejudice”, that the advice is not in any event disclosable because it is not relevant to the proceeding and that the letter did not constitute a waiver of legal professional privilege.

8. Argument proceeded on the undisputed premise that counsel’s advice referred to in the letter of 20 November 2020 is contained in a document. 

   Legislative foundation of the application

9. It is an important feature of the present application that the applicant does not contend the respondent has a duty to disclose the advice, pursuant to r 211 UCPR, as being “directly relevant to an allegation in issue in the pleadings”. This reflects an acceptance that counsel’s opinion is unlikely to constitute an admission of any fact in issue or have other relevance to any allegation in the pleadings. Why then does the applicant contend this Court should order the disclosure of counsel’s advice, privileged or not? The answer, the applicant submits, is that “there are special circumstances and the interests of justice require it”, pursuant to r 223(4)(a).

10. Rule 223 relevantly provides:

    “223  Court orders relating to disclosure

    (1)  The court may order a party to a proceeding to disclose to another party a document or class of documents by––

    (a)delivering to the other party in accordance with this part a copy of the document, or of each document in the class; or

    (b)producing for the inspection of the other party in accordance with this part the document, or each document in the class.

    (2)  The court may order a party to a proceeding (the “first party”) to file and serve on another party an affidavit stating––

    (a)that a specified document or class of documents does not exist or has never existed; or

    (b)the circumstances in which a specified document or class of documents ceased to exist or passed out of the possession or control of the first party.

    …
    (4)  An order mentioned in subrule (1) or (2) may be made only if––

    (a)there are special circumstances and the interests of justice require it; or

    (b)     it appears there is an objective likelihood––

    (i)     the duty to disclose has not been complied with; or

    (ii)a specified document or class of documents exists or existed and has passed out of the possession or control of a party.  …” (emphasis added)

    The relevance issue

11. The application seeks an order mentioned in r 223(1)(a), on the basis r 223(4)(a) is satisfied. Yet the applicant does not contend the respondent has a duty to disclose the advice, pursuant to r 211 UCPR. Can r 223 apply to compel disclosure of a document which is not directly relevant to an issue in the proceeding?

12. The applicant’s supplementary submissions on this question referred to the following observation of the plurality in Mann v Carnell:[1]

    “The privilege may be invoked, and its application may be of importance, in pre-trial proceedings such as the discovery and inspection of documents. Documents may be discoverable even though they may not be admissible in evidence. Their importance may be, for example, that they indicate a useful line of investigation, or that they contain information which could affect the manner in which a party may decide to conduct proceedings.”[2] (emphasis added)

    [1](1999) 201 CLR 1.

    [2](1999) 201 CLR 1, 10-11. The applicant also highlights reference to Mann v Carnell in Fraser v Fraser [2019] WASC 135, but that case involved a disclosure which it was accepted could inform a line of cross-examination at trial, regarding a change of position.

13. That passage is of limited assistance in informing consideration of the UCPR, which speaks not of discovery or of a test of whether a document is admissible in evidence. Rather, it speaks of disclosure and a test of whether a document is directly relevant to an issue in the proceeding. Greater assistance on the relevance issue may be derived from the words of the provision under which the court is here asked to compel disclosure.

14. The context that r 223 falls within Chapter 7 “Disclosure” might at first blush be thought to suggest it only applies to documents to which the r 211 duty of disclosure applies. However, while the operation of r 223(4)(b)(i) turns upon whether the r 211 duty of disclosure has been complied with, r 223(4)(a) does not. Its sole criterion is that “there are special circumstances and the interests of justice require it”. This clearly allows of the possibility that special circumstances and the interests of justice may found the exercise of a court’s discretion to require disclosure of a document, notwithstanding that the document is not caught by r 211’s duty of disclosure.

15. Nonetheless, the fact that the document in issue is not caught by the r 211 duty may remain a consideration in assessing whether the circumstances truly have the threshold character required by r 223(4)(a) and in turn whether the discretion ought be exercised. Putting it differently, that assessment may be informed by the foundational context in which the judge is being asked to intervene and exercise the exercise the discretion, viz, in the proceeding in which the application for a r 223 order is made.

16. Here the relevance of the document in issue to the proceeding is at best indirect, in that its disclosure may inform a decision whether or not to settle the proceeding.  I am prepared to accept such a feature might, consistently with r 5(2)’s emphasis on the application of the rules with the objective of avoiding undue delay, inform consideration of the dual criterion that there are special circumstances and the interests of justice require disclosure.  However, I do not accept, and nor does the applicant assert, that feature could of itself be sufficient to meet the criterion. 

    The complaint of unfairness

17. The applicant’s argument that the dual criterion has been met centred upon the interests of justice, the implication being those interests were such as in this case to also constitute special circumstances.  That argument was that it is unfair for the respondent to use counsel’s advice as a persuasive device in support of its settlement offer while depriving the applicant of access to that advice.  As the applicant’s counsel put it, it is not in the interests of justice that the respondent should be permitted to use counsel’s advice as a sword in support of its position and invoke privilege as a shield against full understanding of that position by the applicant. 

    Consideration

18. The starting point for weighing the force of that argument is that the alleged waiver occurred in correspondence which was endorsed “without prejudice”.  It has long been established that parties engaging in communications attempting to compromise litigation may avoid the embarrassment which the liability of their communications being put into evidence may impose by defining such communications through the use of the words “without prejudice”.[3]  However, the rule against disclosure of without prejudice communications is not absolute.[4]  The rule will not protect against disclosure where disclosure is not sought for a purpose inconsistent with the rationale underpinning the rule, namely “the public interest in promoting the settlement of disputes without calling in aide the courts”.[5]

    [3]Field v Commissioner for Railways for NSW (1957) 99 CLR 285, 291.

    [4]See for example the exceptions listed in Unilever plc v Procter & Gamble Co [2001] 1 All ER 783, 791-3.

    [5]To adopt the words of Lander J in Pihiga v Roche [2011] 278 ALR 209, [86].

19. In the present case the applicant emphasises it is neither seeking to use the communication as evidence in its claim, nor seeking to use it inconsistently with the expressed or implied agreement between the parties that the communications will be kept confidential.  The applicant’s argument is that it intends to use the full content of the advice to fairly comprehend the force of the respondent’s offer to settle.  Such a use is consistent with the public interest in promoting the settlement of disputes and will be internal to the deliberations of a party to the proceedings and thus not breach any confidence as between the parties.  I accept such use would not offend the principles underpinning the rule. It follows the “without prejudice” endorsement would not preclude disclosure here. 

20. The more fundamental challenges for the applicant are whether there has been a waiver of privilege and, if there has, whether there are special circumstances and the interests of justice require disclosure.  Those considerations do not fall for analysis in isolation.  Each turns upon the context in which the communication occurred, particularly whether there is substance to the applicant’s complaint of unfairness.

21. For a time there existed some tension in the authorities as to whether disclosure of a conclusion expressed in legal advice, without disclosure of the reasons, will result in a waiver of privilege.  In Attorney-General (NT) v Maurice,[6] Gibbs J[7] and Mason and Brennan JJ[8] cited with approval the analysis in Wigmore Evidence in Trials at Common Law[9] which explained that one of the elements of waiver is that of fairness and consistency.  Wigmore wrote:

    “A privileged person would seldom be found to waive, if his intention not to abandon could alone control the situation.  There is always also the objective consideration that when 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.  He may elect to withhold or to disclose, but after a certain point his election must remain final.”[10] (emphasis added)

    [6](1986) 161 CLR 475.

    [7](1986) 161 CLR 475, 481.

    [8](1986) 161 CLR 475, 488.

    [9](1961), Vol 8, par 2327, p 637.

    [10]Cited by Gibbs J in Attorney-General (NT) v Maurice (1986) 161 CLR 475, 481.

22. In Maurice, Dean J observed:

    “Waiver of legal professional privilege by imputation or implication of law is based on notions of fairness.  It occurs in circumstances where a person has used privileged material in such a way that it would be unfair for him to assert that legal professional privilege rendered him immune from procedures pursuant to which he would otherwise be compellable to produce or allow access to the material which he has elected to use to his own advantage.  Thus, ordinary notions of fairness require that an assertion of the effect of privileged material disclosure of part of its contents in the course of proceedings before a court or quasi-judicial tribunal be treated as a waiver of any right to resist scrutiny of the propriety of the use he has made of the material by reliance upon legal professional privilege … If, in such a document, a party sets forth part of the contents of a particular identified document or communication or asserts the effect of or his reliance upon a particular identified document or communication, it may be the considerations of fairness might require that he be treated as having waived any legal professional privilege in relation to the whole document or communication.”[11] (emphasis added)

    [11]Attorney-General (NT) v Maurice (1986) 161 CLR 475, 492-493.

23. Those observations were cited in Bennett v Chief Executive Officer, Australian Customs Service.[12]  In that case the appellant sought freedom of information access to documents which the Australian Customs Service refused to produce.  At issue was whether there had been a waiver of privilege attaching to the advice of the Australian Government Solicitor because of disclosure that it had advised Customs the relevant regulation did not prohibit all public comment by an officer on matters of public administration and that the appellant was not correct in asserting that he was not subject to the Act and Regulations if he made public statements about Customs related matters.  Tamberlin J considered disclosure of the effect of the advice constituted an imputed waiver.  Gyles J, with whom Tamberlin J agreed, reached the same conclusion, observing:

    “The voluntary disclosure of the gist or conclusion of the legal advice amounts to waiver in respect of the whole of the advice to which reference is made including the reasons for the conclusion. … It is not a matter simply of applying general notions of fairness as assessed by the individual judge.  The authorities to which I have referred show that it is well established that for a client to deploy the substance or effect of legal advice for forensic or commercial purposes is inconsistent with the maintenance of the confidentiality that attracts legal professional privilege.”[13]

    [12](2004) 140 FCR 101.

    [13][2004] 210 ALR 220 [65], [68].

24. That observation did not find favour in the Victorian Court of Appeal in Secretary, Department of Justice v Osland.[14]  After reviewing the authorities, Maxwell P, with whom Ashley JA and Bongiorno A-JA agreed, found there was no general rule to the effect stated by Gyles J, observing:

    “Whether there is imputed waiver in any given case is a question to be determined in the circumstances of that case. … Disclosure of the conclusion (or the gist, substance or effect) of legal advice may, or may not, amount to a waiver of privilege in respect of the advice as a whole.  Whether it does in a particular case will depend on whether, in the circumstances of the case, the requisite inconsistency exists, between the disclosure on the one hand and the maintenance of confidentiality on the other.”[15]

    [14](2007) 95 ALD 380.

    [15]Secretary, Department of Justice v Osland (2007) 95 ALD 380, [42], [49].

25. When Osland v Secretary, Department of Justice was, in turn, heard on appeal by the High Court[16] the plurality agreed with the reasoning of Maxwell P, observing:

    “Whether, in a given context, a limited disclosure of the existence, and the effect, of legal advice is inconsistent with maintaining confidentiality in the terms of advice will depend upon the circumstances of the case.”[17]

    [16](2008) 234 CLR 275.

    [17](2008) 234 CLR 275, [49].

26. Such an approach is consistent with the principles earlier identified by the High Court in Mann v Carnell[18] where the plurality observed:

    “Waiver may be expressed 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 … 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.”[19]

    [18](1999) 201 CLR 1.

    [19]Mann v Carnell (1999) 201 CLR 1, [29].

1. Their Honours went on to observe:

   “Disclosure by a client of confidential legal advice received by the client, which may be for the purpose of explaining or justifying the client’s actions, or for some other purpose, will waive privilege if such  disclosure is inconsistent with the confidentiality which the privilege serves to protect.  Depending upon the circumstances of the case considerations of fairness may be relevant to a determination of whether there is such inconsistency.”[20]

   [20]Mann v Carnell (1999) 201 CLR 1, [34].

2. The following relevant principles therefore apply here.  Disclosure of the substance or effect of legal advice for forensic or commercial purposes may amount to a waiver of the confidentiality that attracts legal professional privilege.  Whether it will do so depends upon whether such a disclosure is inconsistent with maintaining the confidentiality the privilege serves to protect.  Whether there is such inconsistency depends upon the circumstances of the case, including, in the assessment of inconsistency, the fairness or unfairness of maintaining confidentiality in light of the disclosing party’s conduct.

3. The premise of the applicant’s argument about the circumstances of this case is that the disclosure of counsel’s reasons occurred for persuasive purposes because it was in correspondence making a settlement offer. 

4. The respondent’s counsel emphasises that the respondent’s communications preceding the letter of 20 November 2020 mentioned the fact counsel’s advice was being obtained.  The implication seemingly sought is that the references to counsel’s advice in the letter of 20 November 2020 went to the fact it had now been received, rather than its content.  However, the disclosure went beyond indicating advice had been received, or for that matter simply putting the settlement offer.  The respondent’s counsel also emphasises the broader context that the parties were contemplating a mediation, which they were obliged to enter into in good faith, and that the respondent was entitled to protect its position in respect of that obligation by putting its “best offer” in advance.  However, the disclosure went beyond putting such an offer. 

5. The words of the disclosure indicated the effect of counsel’s advice was the plaintiff would be unlikely to establish the defendant is liable for the alleged psychiatric injury and, in the unlikely event liability was established, that the quantum which would be awarded would not be of the magnitude sought by the plaintiff.  Objectively considered the only purpose in conveying those aspects of counsel’s advice was the persuasive purpose of encouraging acceptance of the offer contained in the same correspondence.  The unfairness allegedly arising is that the respondent would have the applicant consider the respondent’s offer with knowledge the advice of the respondent’s counsel is unfavourable to the applicant’s case yet not expose the reasons for that advice.   

6. I perceive no unfairness and, if I am wrong about that, any such unfairness is so trivial that the circumstances fall well short of meeting the r 223(4)(a) test.

7. A barrister’s advice about prospects for liability and quantum at trial will be premised upon the law, the nature of the competing cases as pleaded, the documents disclosed as relevant to an allegation in issue in those pleaded cases and the strength of the evidence likely to be adduced at trial.  There is no secret as to the law, the nature of the pleaded cases or the disclosed documents.  There is therefore no unfairness in the applicant not having the benefit of the respondent’s counsel’s advice to be informed of those matters in order to properly consider the respondent’s offer.  Like the respondent, the applicant has the right to procure lawyer’s opinions about such matters for herself, including from a barrister. 

8. The strength of the evidence likely to be adduced at trial is a factual subject about which one side will likely have at least some different knowledge than the other.  The applicant’s absence of knowledge of that topic, to the extent it appeared in the respondents’ counsel’s advice, therefore placed the applicant in a position of partial ignorance relative to the respondent in considering the merits of the respondent’s offer.  But that is no different than the respondent’s position of partial ignorance in having to meet the applicant’s case, or in making offers to settle it, not knowing what the applicant’s side knows about the strength of the evidence likely to be adduced at trial.  It is not ordinarily regarded as unfair, indeed it is an unremarkable incident of litigation, that each party to litigation likely knows something the other does not about the strength of the evidence likely to be adduced at trial.  To the extent it is potentially disadvantageous that the applicant was left to consider the respondent’s offer in ignorance of what the advice reveals about the strength of the likely evidence, that potential disadvantage is offset by the respondent’s comparable ignorance vis-à-vis the applicant’s knowledge of the strength of the likely evidence.

9. Further to these considerations, to the extent the letter disclosed counsel’s conclusions, it did so sparsely.  It did not enlarge in the slightest way upon the bare conclusions mentioned.  For example, it did not indicate the barrister concluded the respondent would likely win because the applicant would fail to prove causation.  Nor, for example, did it indicate what counsel concluded the likely quantum of damages would be. In lay terms, all it effectively said was, “Our barrister advised that we will likely win and, if we don’t, you won’t get nearly as much as you are claiming”. 

10. There is an air of unreality in the notion that a plaintiff represented by a solicitor and barrister, as the applicant is, would give any weight to such bare unpersuasive posturing.  It might have been of interest to the applicant and her lawyers in considering the offer if the explanations for the respondent’s counsel’s opinions were disclosed.  However, the absence of any such explanations at all exposes the implausibility of the bare revealing of those conclusions having any material influence on the applicant’s consideration of the offer.  It follows that absence was unlikely to result in forensic advantage to the respondent by so putting the offer, or result in unfairness to the applicant in considering it. 

11. In the circumstances of this case, informed by the above considerations of fairness and the sparse extent of the disclosure, I conclude the disclosure was not inconsistent with maintaining the confidentiality of counsel’s advice which legal professional privilege serves to protect. The disclosure did not waive privilege.

12. The same reasons demonstrate that the present circumstances are not special and fall well short of the interests of justice requiring disclosure.

    Conclusion and Orders

13. The application as litigated before me must fail.  I am conscious the pre-hearing resolution of other aspects of the application may be relevant to costs and so will give the parties an opportunity to consider their position regarding costs.

14. My orders are:

15. Application dismissed.

16. I will hear the parties as to costs, if costs have not been agreed in the meantime, at 10.00 am on 21 May 2021 (out of town parties having leave to appear by telephone or video-link).