Harlen and Hellyar (No. 4) - [2020] FamCA 600

FAMILY COURT OF AUSTRALIA

HARLEN & HELLYAR (NO. 4)

[2020] FamCA 600

FAMILY LAW – LEGAL PROFESSIONAL PRIVILEGE – alleged waiver – whether privilege applies in the first place – implied waiver by conduct allegedly inconsistent with maintaining the privilege – whether such inconsistent behaviour demonstrated in the facts of this case.

Evidence Act 1995 (Cth), ss 118, 122
Evidence Act 2008 (Vic), s 122(2)
Family Law Act 1975 (Cth), s 90UC

Attorney-General (Northern Territory) v Maurice (1986) 161 CLR 475
Baker v Campbell (1983) 153 CLR 52
Banks & Banks [2015] FamCAFC 36
Bilal v Omar (2015) 53 Fam LR 121
Commissioner of Taxation v Rio Tinto Ltd (2006) 151 FCR 341
Deiter & Deiter [2011] FamCAFC 82
DSE (Holdings) Pty Ltd v Intertan Inc (2003) 127 FCR 499
Eaby & Speelman [2015] FamCAFC 104
Hall v Hall (2016) 257 CLR 490
Harlen & Hellyar (No. 2) [2020] FamCA 413
Harlen & Hellyar [2020] FamCA 21
Harris v Caladine (1991) 172 CLR 84
Mann v Carnell (1999) 201 CLR 1
Marvel v Marvel (2010) 43 Fam LR 348
Redmond & Redmond [2014] FamCAFC 155
Rocacelli v Seles [2019] FamCA 105
Salah & Salah (2016) 56 Fam LR 299
SS & AH [2010] FamCAFC 13
Telstra Corporation Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152
Vic Hotel Pty Ltd v DC Payments Australasia Pty Ltd (2015) 321 ALR 191
Viterra Malt Pty Ltd v Cargill Australia Ltd (2018) 58 VR 333

Paul D. Finn, Fiduciary Obligations (Law Book Company, 1977)
Ahmed Terzic, Implied Waiver of Legal Professional Privilege: A Search for Consistency (2018) 45 Australian Bar Review 287

APPLICANT:

Ms Harlen

RESPONDENT:

Mr Hellyar

FILE NUMBER:

MLC

13634

2017

DATE DELIVERED:

24 July 2020

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

The Honourable Justice Wilson

HEARING DATE:

7 & 20 July 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr J. St John QC

SOLICITOR FOR THE APPLICANT:

Peter Szabo Family Law

COUNSEL FOR THE RESPONDENT:

Mr P. O'Shannessy SC

SOLICITOR FOR THE RESPONDENT:

Mann Lawyers

Orders

I dismiss the respondent’s application on 7 July 2020 in relation to the waiver of legal professional privilege.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Harlen & Hellyar has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 13634 of 2017

Ms Harlen

Applicant

And

Mr Hellyar

Respondent

REASONS FOR JUDGMENT

Introduction

An issue has arisen in this proceeding about whether legal professional privilege has been waived. For ease of reference, it is convenient (although incorrect) to call the applicant “the wife” and the respondent “the husband”.
Relevantly distilled, the issue may be shortly stated. On 12 February 2018 Peter Szabo was retained by the wife as her solicitor. In the period 12 to 15 February 2018 the wife communicated with Mr Szabo in his professional capacity as the wife’s legal practitioner. The husband asserts that on 15 February 2018 in open court during an appearance before Johns J by reason of the wife’s representative publically stating certain things, the privilege that otherwise attached to the matters stated by her representative was waived.
On behalf of the wife, Mr St John QC who appeared for the wife conceded that privilege had been waived in respect of the statements made in open court on 15 February 2020. However, Mr St John resisted the suggestion that privilege had been waived in the period between 12 February and in the lead up to the appearance on 15 February 2018.

Synopsis

For the reasons that follow, in my judgment the husband’s application is dismissed.

Relevant factual setting

At its core, this litigation involves an application to set aside an agreement said to have been made in pursuance of s 90UC of the Family Law Act on 10 February 2014. The husband seeks to rely on it and to enforce it. Conversely, the wife says the agreement is invalid on a variety of grounds.
This litigation has been on foot for several years. In May of this year I assumed control of this case and fixed it for trial. On the wife’s application, on 7 July 2020 I made orders vacating the trial date of 6 July 2020 and refixed the trial for 1 March 2020, largely because the state of preparation was not as it should have been. In the time that would have otherwise been devoted to the trial between 6 and 10 July 2020 I used those days productively to deal with extant interlocutory applications such as disclosure disputes, evidentiary objections and this dispute over an alleged waiver of legal professional privilege.
To better understand the context of the current waiver dispute it is necessary to narrate certain matters as they have emerged from affidavits made by the wife on the one hand as the client and her legal advisor, Mr Szabo, on the other hand. No dispute arose that as between the wife and Mr Szabo a confidential professional relationship existed involving trust and confidence and concomitant fiduciary obligations.[1]
[1] Paul D. Finn, Fiduciary Obligations (Law Book Company, 1977).
Mr Szabo was first instructed in this case by the wife on 12 February 2018. In paragraph 2 of Mr Szabo’s affidavit sworn 11 December 2018 he deposed to the circumstances of his first instructions from the wife. Relevantly, Mr Szabo divided the events of 12 February 2018 into two parts. The first he narrated in the following terms –
I first received instructions from Ms Harlen on 12 February 2018. The first return date of an Initiating Application filed by her former de facto partner, Mr Hellyar (“Hellyar”), was pending on 15 February 2018. Hellyar was seeking orders enforcing a Section 90UC Agreement purportedly entered into on 10 February 2014 (“the Financial Agreement”), specifically that Ms Harlen vacate the property at O Street, Suburb E (“O Street”) and he retain O Street to her exclusion thereafter.
That statement told very little of the terms or details of the wife’s retainer of him. It amounted to little more than the date on which he received instructions, the fact that an application was returnable on 15 February 2018 and the orders the husband sought.
The second part of the events of 12 February 2018 was narrated by Mr Szabo at paragraph 3 of his 11 December 2018 affidavit. In that paragraph Mr Szabo swore that later in the day on 12 February 2018 he spoke to Mr N of the firm Z Lawyers. Mr Szabo did not say whether that conversation was face-to-face or by telephone and if the latter, who telephoned who. At all events, the terms of paragraph 3 of his affidavit was as follows –
Later that day I spoke with Hellyar’s solicitor, Mr N of Z Lawyers advising that Ms Harlen would consent to Hellyar having exclusive occupancy of O Street as she was no longer living in the property and she was happy for orders to be made to that effect. I made it clear Ms Harlen would be seeking Orders in due course that the Financial Agreement be held to be void, or that it be set aside, and that a later date be fixed for the determination of that question. I pointed out that even if the Agreement was not set aside, my client had an entitlement for spousal maintenance as she was unable to support herself without a pension.
At the time, Z Lawyers was the firm of solicitors representing the husband.
Of the exchange recorded in paragraph 3 of Mr Szabo’s affidavit, the second and third sentences recorded the wife’s position as at that date which is consistent with her current position in this litigation. It seemed to me that only the first sentence could have presented a factual setting on which the husband may have relied in support of the waiver contentions.
The following day, that is to say on 13 February 2018 Mr Szabo deposed to sending a letter to Mr N by way of confirmation of the conversation between the two on 12 February 2020.
No relevant event occurred on 14 February 2020.
On 15 February 2018 this case came before Johns J. Mr Szabo appeared for the wife before her Honour. Mr Ashley Richardson of counsel appeared for the husband before Johns J. Mr Szabo swore to the events of that day in paragraph 5 of his 11 December 2018 affidavit. Mr Szabo said that after the callover he and counsel then appearing for the husband discussed a division of chattels and was “in accordance with the terms of the letter (he) sent to Mr N” on 13 February 2018. He said –
It was not discussed between us that the Orders my client was prepared to consent to on that day finalized anything other than the occupation of O Street and division of chattels. I consistently made it clear that my client intended to challenge the validity of the Financial Agreement and would be commencing an application to that effect in the near future.
Mr Szabo swore that notation (b) to the minutes that day reflected his client’s intentions to challenge the validity of the financial agreement. Those minutes became consent orders that Johns J made on 15 February 2014.
Mr Szabo deposed to the wife’s emotional state on the day of the hearing before Johns J. He gave those details in paragraph 6 of his affidavit. It was in the following terms –
Ms Harlen appeared upset and anxious on the day of the hearing. When explaining (with the assistance of an interpreter) the negotiations that were taking place, and the Minutes of Orders finally agreed upon and intended to be placed by consent before the Court, I made it clear to her that the proposed Consent Orders would resolve only the occupation of O Street and the division of chattels. I had no instructions to settle anything other than those two issues.
The husband relied on various passages of the wife’s affidavits in support of the husband’s waiver argument.
The wife made an affidavit on 6 August 2018, filed on 7 August 2018. The husband contended he relied on the evidence in paragraphs 23 to 26 and in paragraph 78 of that affidavit. The matters set out immediately below represent a distillation of her evidence in those paragraphs –
a)on 14 October 2012 the husband took the wife to the offices of Z Lawyers where the husband introduced the wife to a female interpreter then left;
b)after waiting for about 30 minutes a solicitor the wife now knows to be Mr F took the wife and the interpreter to a room within the premises of Z Lawyers;
c)the wife said the interpreter relayed what Mr F told her namely that the husband would pay the wife nothing if the wife and the husband separated within five years or six and the husband would pay the wife a specific sum if they separated after longer but the sum to be paid depended on the length of the relationship;
d)the wife did not know what the husband’s overall financial position was as he was secretive about it;
e)she felt overwhelmed, she said she had difficulty understanding all that was said to her, she felt nervous and anxious and she said she felt that she was inconveniencing Mr F; and
f)she was asked to sign the document which she did as did the interpreter and then Mr F;
In paragraph 24 the wife said she telephoned the husband to collect her, which he did, at which time he took the copy agreement Mr F had given her saying he (the husband) should retain the document as the wife would lose it.
In paragraph 25 and 26 of her affidavit the wife said she had no further communication from Mr F, she did not receive an account from him, she does not have a copy of the agreement signed on 14 October 2012 and since that date, despite several requests, Mr F had failed to provide her with a copy.
The husband also relied on the information in paragraph 78 of her affidavit made 6 August 2018. That paragraph spoke of an agreement made on 10 February 2014. The information in paragraphs 22 to 26 of the same affidavit spoke of an agreement made in October 2012. So far as the 2014 agreement was concerned, the wife addressed it in paragraph 78 of her affidavit. In that paragraph the wife said of the 2014 agreement –
a)she had not seen the 2014 agreement since she signed it on 10 February 2014;
b)Mr F did not witness her execution of it;
c)only the husband and Mr N witnessed the wife’s execution of the agreement;
d)the agreement and its contents were not interpreted to her on 10 February 2014; and
e)no interpreter was present.
The husband also relied on various paragraphs of the wife’s affidavit made on 17 June 2019 in support of his waiver of privilege contentions. Specifically he relied on paragraphs 34 to 39 of that affidavit. Certain aspects of those paragraphs corresponded to paragraphs of the wife’s 6 August 2018 affidavit. For example –
a)paragraph 22 of the 6 August 2018 affidavit was identical to paragraph 35 of the wife’s 17 June 2019 affidavit;
b)paragraph 23 of the 6 August 2018 affidavit closely corresponded with but was not identical to paragraph 36 of the wife’s 17 June 2019 affidavit;
c)paragraph 24 of the 6 August 2018 affidavit bore some similarity to paragraph 37 of the wife’s 17 June 2019 affidavit;
d)paragraph 25 of the 6 August 2018 affidavit was identical to paragraph 38 of the wife’s 17 June 2019 affidavit; and
e)paragraph 26 of the 6 August 2018 affidavit corresponded closely with the paragraph 39 of the wife’s 17 June 2019 affidavit.
The husband further relied on the wife’s evidence about what the husband described as her “alleged lack of advice” on 10 February 2014 in paragraphs 51, 53 and 98 of the wife’s 17 June 2019 affidavit. Lengthy as those paragraphs are, it is necessary to record their content. Paragraph 51 was in the following terms –
On 10 February 2014, the Respondent took me to the office of his solicitor, Mr N. When I asked him why we were going, he replied that I needed to sign a document. I asked him what sort of document and whether it was a Will. He replied that it was not a Will but something similar. He looked unusually stressed. He said I need not worry because the document was only a formality. I asked if there would be an interpreter there and the Respondent replied that there was “no need” for one. When we arrived at Mr N's office, neither Mr F nor an interpreter were present, only Mr J. The Respondent and I sat on one side of a table and Mr N on the other side. A document was handed to me. I had not seen it before. It looked similar to the 2012 Agreement but I could not read or understand it all. I asked the Respondent what I was signing. He told me to sign the document and not to worry about it. Mr N did not speak to me. I was nervous and felt pressured to sign. I felt I had no real choice but to sign the document and I signed all the pages I was asked to sign. There were no other signatures on the document when I signed it. The Respondent then signed the document. He then said other people would come later to sign the document. I did not know who or what he was referring to. I was not given a copy of the document I signed. The entire time we were there the Respondent continued to look very stressed. At the time, I did not understand why.
Paragraph 53 purported to paraphrase certain allegations in this case. It was as follows –
In these proceedings, the Respondent has alleged that on 10 February 2014 when the agreement was executed Mr F was present and represented me. I deny this. The Respondent has also alleged I was assisted by an interpreter, Ms Q. I was not. I believe Ms Q was the interpreter who attended the offices of the Respondent's solicitors on 14 October 2012 when I signed the 2012 agreement.
Paragraph 98 related to the events of 10 February 2014. It was as follows –
In his affidavit in support of his Application sworn 20 December 2017, the Respondent annexed (as annexure R-1) what he alleged was a true copy of the 2014 Agreement. I had not seen this document since the Respondent and I had signed it on that day. Mr F did not witness me signing the Agreement on 10 February 2014. The only witnesses to me signing the document were the Respondent and Mr N. An interpreter's clause is on the last page of the copy of the 2014 Agreement annexed to the Respondent's affidavit. Neither the Agreement nor its contents were interpreted to me on 10 February 2014. No interpreter was present.
In paragraphs 130, 132 and 133 of the wife’s trial affidavit made on 1 June 2020 the wife deposed to the following –
130.On 12 February 2018 I met with Mr Peter Szabo, solicitor and instructed him to act on my behalf thereafter. I did not have an interpreter with me. I had no money to pay Mr Szabo immediately but he was prepared to assist me as the hearing of Hellyar’s application was on 15 February 2018. I gave Mr Szabo copies of the court documents which had been sent to R Lawyers.
132.I attended the Family Court on 15 February 2018 with Mr Szabo and an interpreter. I was very stressed and very anxious especially as I had not seen Hellyar since we travelled to the Police Station on 6 September 2017. I understood from what Mr Szabo had told me, that the Court that day was only dealing with me leaving O Street and an immediate division of major household items. I instructed Mr Szabo only about resolving those immediate issues.
133.I never intended there was to be a final property settlement between Hellyar and me that day. I wanted to challenge the 2014 Agreement as I disputed its validity and instructed Mr Szabo accordingly. Mr Szabo told me the Court would deal with immediate issues on 15 February 2018 and deal with the validity of the Agreement on another day. The Orders made by consent on 15 February 2018, as explained to me by Mr Szabo, reflected this.
As has already been mentioned above, on behalf of the wife Mr St John QC maintained that legal professional privilege was waived only in relation to events at court before Johns J on 15 February 2018 but not otherwise.
In Mr St John’s written submissions dated 5 July 2020 Mr St John provided an overview of this litigation. Relevantly paraphrased, it was as follows –
a)the wife and husband commenced a romantic relationship in March 2011, commencing to reside together in a domestic relationship in July 2012 (although the husband contends that the parties did not commence cohabitation until October 2012);
b)final separation occurred on 6 September 2017;
c)two of the wife’s children from a previous relationship lived with the wife and husband from September 2013 until September 2017;
d)Mr Szabo has represented the wife since 12 February 2018;
e)Mr Hellyar commenced this litigation on 27 December 2017 returnable on 15 February 2018;
f)by 12 February 2018 Ms Harlen had not filed any court documentation;
g)on 12 February 2018 Mr Szabo and Mr N of Z Lawyers spoke by telephone during which conversation Mr Szabo stated that Ms Harlen consented to Mr Hellyar’s application for her to vacate the property at O Street Suburb E but that she challenged the validity of the agreement made 10 February 2014 and that she sought maintenance;
h)correspondence followed on 13 February;
i)on 15 February 2018 the application came before Johns J who stood the matter down to enable the parties to negotiate;
j)consent orders were agreed and put to her Honour for approval;
k)Johns J made those orders by consent; and
l)during submissions before Johns J Mr Szabo informed her Honour that the wife proposed to challenge the validity of the 10 February 2014 agreement.

In this proceeding Mr Hellyar argues that the final consent orders made by Johns J operate in such manner as to estop the wife from pursuing all of the applications she makes in this proceeding with the exception of her application for spousal maintenance under s 90UI(2) of the Family Law Act. To a consideration of that I now turn.

Waiver of privilege

Against that factual backdrop the husband has asserted that the wife cannot now maintain that legal professional privilege attaches to her communication with Mr Szabo over the three relevant days of 12 and 13 February 2018 and during the day on 15 February 2018 because, so he says, the wife waived that privilege by adopting an approach inconsistent with its maintenance.
After examining the material in relation to this application subsequent to 7 July, I took the view that it was necessary and desirable to have counsels’ submissions on certain threshold matters as they had not been apparent, at least not to me, on 7 July. On 20 July I conducted a mention during which the following matters emerged –
a)according to Mr O’Shannessy SC, in order for Mr Szabo to come away from the conference with the wife on 12 February 2018 with instructions to challenge the agreement, Mr Szabo must have received instructions from the wife about the basis on which an application was to be made for orders that the agreement be set aside;
b)according to Mr St John QC, no notes or other record exists of the instructions that Mr Szabo may have received on 12 February 2018;
c)Mr St John said on 12 February 2018 no Thai interpreter accompanied the wife to her conference with Mr Szabo;
d)Mr St John said a person who spoke Thai accompanied the wife to her conference with Mr Szabo and imperfectly translated for her; and
e)he also said on 12 February 2018 the wife provided Mr Szabo with a copy of the application returnable on 15 February 2018 and they discussed what was likely to occur on 15 February 2018.
Mr O’Shannessy SC directed my attention to paragraph 133 in particular of the wife’s trial affidavit. Mr O’Shannessy said Mr Szabo must have had instructions on the issue in order to tell Johns J that the validity of the 2014 agreement was in issue.
Before addressing whether that contention has been made out, it is necessary to say a little about the legal concept of the waiver of privilege.
It was common cause in this application that the lead authority on the subject of waiver of legal professional privilege is the decision of the High Court in Mann v Carnell.[2] There, the plurality (Gleeson CJ, Gaudron, Gummow and Callinan JJ) identified the reason for the existence of legal professional privilege at common law in the following terms –
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.
[2] (1999) 201 CLR 1.
Citing Attorney-General (Northern Territory) v Maurice,[3] the plurality held that inconsistent conduct by the person entitled to the benefit of the privilege, the client, may cause the privilege to be waived. The plurality said the following –
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.
[3] (1986) 161 CLR 475.
In this case the alleged waiver is said to have been implied. If particular conduct is held to be inconsistent with the maintenance of confidentiality which the privilege is intended to protect, the waiver is frequently described as being imputed by operation of law. Of that concept the High Court held as follows in Mann v Carnell –
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”.
Whether or not the client, here the wife subjectively intended to abandon the privilege is largely beside the point as the relevant enquiry is whether a particular act or conduct is inconsistent with the maintenance of the privilege. The critical issue was expressed by the plurality in Mann v Carnell in the following terms –
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.
In separate reasons, McHugh J emphasised the need to examine the circumstances of each case in which waiver is asserted. His Honour held as follows –
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.
Section 122 of the Evidence Act bears upon the factual examination necessary to determine whether an implied waiver has been effected. In Bilal v Omar[4] the Full Court addressed that proposition holding that the privilege holder acts inconsistently with the maintenance of the privilege by putting the contents of an otherwise privileged communication in issue. In Bilal v Omar, the court applied the observations of the Full Court of the Federal Court in Commissioner of Taxation v Rio Tinto Ltd.[5]
[4] (2015) 53 Fam LR 121.
[5] (2006) 151 FCR 341.
In his written submissions on the waiver issue, Mr O’Shannessy SC contended, correctly in my view, that the operation of s 122 of the Evidence Act can be determined ahead of trial, that is to say in the interlocutory phases of a proceeding. Support for that submission emerges from the decision of the Court of Appeal of the Supreme Court of Victoria in Viterra Malt Pty Ltd v Cargill Australia Ltd.[6] In that case the Court of Appeal determined an interlocutory appeal on 11 May 2018 in advance of a trial fixed to commence on 28 May 2018. The question for the court was whether, by including in a pleading a reference to a communication said to be protected by legal professional privilege the party relying on that pleading impliedly waived the privilege that otherwise protected the subject of the communication. The court said it did. After referring to the High Court’s decision in Mann v Carnell, the Court of Appeal held as follows –
42.The parties took us to a number of cases in which courts have dealt with questions of implied waiver of client legal privilege or common law legal professional privilege. They did so, both in order to propound a test suitable for application to the present case, and to provide illustrations of circumstances for comparison to this matter. Two notes of caution must be sounded in this respect.
43.The first is that, notwithstanding that the High Court has made it clear that the common law and s 122(2) are closely related, the question to be asked is the statutory test posed by s 122(2), namely whether the respondents, and in particular Cargill, have ‘acted in a way that is inconsistent with ... objecting’ to the production of the privileged documents sought.
44.Secondly, as the cases themselves make clear, there is no settled list of kinds of action which, by their very nature, give rise to implied waiver: each case must depend upon its own facts and circumstances and drawing generalisations from other cases may be dangerous.
[6] (2018) 58 VR 333.
The Court of Appeal emphasised the inconsistency test. It held as follows –
The above review of the cases makes it plain that there is a single test to be applied, being that in s 122(2) of the Evidence Act. Assistance in understanding and applying that test may be derived from Mann v Carnell and other authorities applying either the common law or the statutory provision. However, each case will depend upon its own facts and circumstances and the drawing of general principles beyond the statement of the inconsistency test may risk departing from the terms of the statute.
In that case an associate justice had held that by pleading the details of documents said to have contained the contents of legally privileged communications, that party had waived the privilege. On appeal, Macaulay J dismissed the appeal. On the hearing of the application for leave to appeal from the decision of Macaulay J the Court of Appeal granted leave to appeal but dismissed the appeal.
An interlocutory appeal was determined in Telstra Corporation Ltd v BT Australasia Pty Ltd.[7]
[7] (1998) 85 FCR 152.
Mr O’Shannessy SC relied on that authority for the proposition that the wife waived legal professional privilege by giving evidence about her state of mind. The relevant passage in the judgment of the plurality (Branson and Lehane JJ) was as follows –
Where, however, a party relies on a cause of action, an element of which is the party's state of mind (including the quality of the party's assent to a transaction) the party is taken to have waived privilege in respect of legal advice which the party had, before or at the time of the relevant events, material to the formation of that state of mind.
In another portion of the plurality’s reasons, their Honours explained the reasoning behind the concept that the opening up of the issue of a state of mind operates as a waiver. It was in the following terms –
Where, as in this case, a party pleads that he or she undertook certain action “in reliance on” a particular representation made by another, he or she opens up as an element of his or her cause of action, the issue of his or her state of mind at the time that he or she undertook such action. The court will be required to determine what was the factor, or what were factors, which influenced the mind of the party so as to induce him or her to act in that way. That is, the party puts in issue in the proceeding a matter which cannot fairly be assessed without examination of the relevant legal advice, if any, received by that party. In such circumstances, the party, by putting in contest the issue of his or her reliance, is to be taken as having consented to the use of relevant privileged material, or to put it another way, to have waived reliance on the privilege which such material would otherwise attract.
One commentator[8] has suggested that certainty and predictability are absent in the inconsistency test.
[8] Ahmed Terzic, Implied Waiver of Legal Professional Privilege: A Search for Consistency (2018) 45 Australian Bar Review 287.
Other authorities that have considered implied waiver include DSE (Holdings) Pty Ltd v Intertan Inc[9] and Vic Hotel Pty Ltd v DC Payments Australasia Pty Ltd.[10] They were examined in Viterra Malt Pty Ltd v Cargill Australia Ltd.
[9] (2003) 127 FCR 499.
[10] (2015) 321 ALR 191.

Consideration

Consistent with the authorities identified above it next became necessary to examine each of the passages of the various affidavits on which the husband relied in asserting that an implied waiver of legal professional privilege had been effected.

The wife’s affidavit made 7 August 2018

It is necessary to go to each paragraph as set out verbatim above.
Paragraph 22 does not involve an issue of privilege. By mentioning that she attended the offices of Mr J the wife did not waive any privilege. No privilege attached to any aspect of that paragraph.
Paragraph 23 is made up of 15 sentences. The husband asserted that each sentence represented a waiver of the legal professional privilege that otherwise attached to that paragraph. I do not agree. The first sentence was a statement that the wife waited in the waiting room. No privilege attached to that sentence nor to the second sentence concerning the arrival of Mr F nor the third sentence about the wife not having previously met or spoken to Mr F. The wife’s statement in the fourth sentence that Mr F apologised for his lateness did not attract legal professional privilege so no issue of waiver arose.
Paragraph 23 contained in the seventh, tenth and fourteenth sentences, all of which were the expressions by the wife of her state of mind. Her feeling of being “very nervous and anxious”, her feeling “overwhelmed (with) difficulty absorbing or understanding all that was being said” and her feeling “under great pressure to do so”, namely sign the document, were statements of her state of mind. Applying the observations in Telstra Corporation Ltd v BT Australasia Pty Ltd, the husband argued that by giving evidence of her state of mind the wife is taken to have waived any privilege in respect of legal advice the wife may have had before or at the time of the relevant events material to the formation of that state of mind. Elsewhere in the eleventh sentence in paragraph 23 the wife deposed to the substance of the advice she was given by Mr F, “as best (she) could understand it”. That “advice” is set out above at paragraph 19(c) of these reasons.
Paragraph 24 of the wife’s 6 August 2018 affidavit did not contain evidence of a confidential communication between the wife and her legal representative. It seemed to me that paragraph 24 did not amount to a waiver. Similar comments apply in relation to paragraphs 26 and 27.
Paragraph 78 of the same affidavit did not contain information of a communication inconsistent with the maintenance of legal professional privilege.

The wife’s affidavit made 17 June 2019

As with the earlier affidavit, it is necessary to go to each paragraph on which the husband relied in his contentions that a waiver occurred.
Paragraph 34 contains no material capable of sustaining a claim to the existence of legal professional privilege. It follows that as no privilege exists, no waiver is enlivened.
Paragraph 34 similarly contained no information that could amount to legal professional privilege and therefore no privilege could be waived.
Paragraph 35 was in the same category.
Paragraph 36 contained similar statements to those in paragraph 23 of the wife’s affidavit made 7 August 2018. In both paragraphs the wife deposed to a state of mind, namely a sense of feeling nervous or anxious, a feeling of being overwhelmed and the wife’s sense of feeling under great pressure to sign the document. The comments above in relation to paragraph 23 of the 7 August 2018 apply with equal force in the context of paragraph 36 it seemed to me. In paragraph 36 of the wife’s 17 June 2019 affidavit she said the following in the context of signing the agreement –
I felt under great pressure to do so, and that I had no real choice but to sign it.
Paragraph 37 of the wife’s 17 June 2019 affidavit was factual and narrative in nature, containing nothing in the way of a legally privileged communication, it seemed to me. Any waiver was therefore beside the point.
Paragraphs 38 and 39 fell into a similar category.
Paragraph 51 of her affidavit addressed events on 10 February 2014, specifically, the execution of the agreement in issue in this case. The wife stated that Mr N was present but he did not speak to the wife. She said she felt nervous, presumed to sign and that she felt she had no choice but to sign the document so she did.
Paragraph 53 contained the wife’s denial that on 10 February 2014 Mr F represented her.
Taken in combination the husband seemed to assert that Mr F was the wife’s solicitor, that Mr F presented documentation for the wife’s execution, the wife felt pressured, revealing in her affidavit a state of mind, with the consequence that she is to be taken to have waived whatever privilege existed in that set of circumstances.
Mr O’Shannessy SC invited me to consider the reasoning of McEvoy J in his Honour’s judgment handed down on 28 January 2020.[11] Mr O’Shannessy contended that McEvoy J was persuaded that despite there being conflicting evidence on the question of the wife’s retainer with Z Lawyers, a confidential professional relationship of legal practitioner and client subsisted between the wife and Mr N on 10 February 2014. McEvoy J expressed difficulty in identifying the information that was said to have been confidential. I encountered the same difficulty.
[11]Harlen & Hellyar [2020] FamCA 21.
It is certainly correct to state that the evidence about the events on 10 February 2014 is in conflict. McEvoy J seems to have proceeded on the basis that Z Lawyers and Mr F were in fact the legal representatives of the wife. That much is reflected in his Honour’s reasons at paragraphs 2, 3, 4, 6, 16 as well as in other paragraphs. Had Z Lawyers not previously acted for the wife during which she imparted confidential information to that time, it is difficult to imagine how an injunction restraining that firm from acting for the husband could have succeeded.
In his address to me on 7 July 2020, Mr O’Shannessy SC argued that the wife’s position in asserting the existence of privilege on the one hand yet adopting an inconsistent approach to it on the other hand lay also in the wife’s evidence at paragraphs 132 and 133 of her affidavit made 1 June 2020. In those paragraphs the wife deposed to the following –
132.I attended the Family Court on 15 February 2018 with Mr Szabo and an interpreter. I was very stressed and very anxious especially as I had not seen Hellyar since we travelled to the Police Station on 6 September 2017. I understood from what Mr Szabo had told me, that the Court that day was only dealing with me leaving O Street and an immediate division of major household items. I instructed Mr Szabo only about resolving those immediate issues.
133.I never intended there was to be a final property settlement between Hellyar and me that day. I wanted to challenge the 2014 Agreement as I disputed its validity and instructed Mr Szabo accordingly. Mr Szabo told me the Court would deal with immediate issues on 15 February 2018 and deal with the validity of the Agreement on another day. The Orders made by consent on 15 February 2018, as explained to me by Mr Szabo, reflected this.
The act constituting the waiver was said to have been the wife disclosing her instructions that she was proposing to challenge the 2014 agreement. Mr Szabo informed Johns J to that effect on 15 February 2018. In order for Mr Szabo to responsibly make that submission to her Honour in those terms, Mr Szabo needed instructions to that effect. I have no doubt whatsoever that Mr Szabo acted entirely properly in communicating his instructions that the wife proposed to proceed by applying for orders setting aside the 2014 agreement. However, it is one thing to say that Mr Szabo had instructions to tell her Honour that the wife wanted to apply to set aside the 2014 agreement. It is another thing to say that that Mr Szabo must be taken to have had instructions about the grounds of and reasons for the making of that submission. It was not proper for him to tell the court that the wife intended to apply to set aside the agreement unless Mr Szabo had instructions to do so. To do so in the absence of instructions would have exposed Mr Szabo at the very least to professional censure. Mr Szabo is a very well known practitioner in this jurisdiction who enjoys a very favourable reputation. In my view it is most unlikely that he announced to Johns J that the wife intended to apply to set aside the 2014 agreement unless Mr Szabo had received instructions to that effect from his client. But it is an altogether different thing to argue that by revealing those instructions, the wife is taken to have impliedly waived the privilege that otherwise applied to the instructions that led Mr Szabo to announcing to her Honour what his client intended to pursue in this case. To the extent that any documents exist recording the instructions given to Mr Szabo on 12 and 13 February 2018, the privilege attaching to those documents was said to likewise have been waived.

I do not consider that any privilege has been waived of communications on 12 and 13 February 2018 by Mr Szabo’s announcement in court on 15 February 2018.
In my view, by Mr Szabo telling her Honour that his client intended to challenge the 2014 agreement, the basis of the intended challenge and the factual milieu of the wife’s grounds were not thereby disclosed, still less were privileged communications revealed or divulged, expressly or by implication. In my view, the situation here is no different to a judge asking counsel on what defence, say, counsel’s client relied. To answer by saying, for example, fraud or equitable estoppel or undue influence does not amount to a waiver of the communications between counsel and his or her client pursuant to which the plea was to be advanced. But in this case Mr Szabo did no more than to state that his client intended to challenge the agreement. Even if he had identified the head of challenge, without more that would not have opened up a basis for trawling through the private and protected communications between solicitor and client.
Mr O’Shannessy SC submitted that Mr Szabo waived the privilege by Mr Szabo’s stating that he had no instructions to settle anything other than the two issues, namely, the occupation of O Street and the division of assets. According to Mr O’Shannessy, the significance of that statement by Mr Szabo was as follows –
MR O’SHANNESSY SC: Now, he is then clearly asserting what the substance of his instructions were. And, by maintaining privilege in regard to that, it’s entirely inconsistent to put before the court what he didn’t have instructions about and what he did have instructions about. But to maintain the privilege, in other words, it must be accepted what I say about I had instructions about because I say so. And it’s privileged. And we say that is the very inconsistency that Mann & Carnell deals with.
Mr O’Shannessy argued that the statement by Mr Szabo was inconsistent with the contents of paragraphs 132 and 133 of the wife’s affidavit. He submitted as follows –
MR O’SHANNESSY SC: But we say it is absolutely clear that she has given a version, and so has Mr Szabo, of the communications between them in the leadup and during that day as to the orders. And we say it’s crystal clear that that’s what they had given us a reference to – sorry, not just a reference to, they have told us about, and which is entirely inconsistent with them maintaining the privilege. And then, of course, the second point, your Honour, is paragraph 25 of Mr St John’s submissions, “if Mr Szabo was mistaken or overlooked”. Now, we say that that goes to Mr Szabo’s state of mind which must go to the instructions that he had on the day.
On the assumption that the husband’s waiver argument succeeded, Mr O’Shannessy submitted that in the result, the wife was required to produce a collection of documents. The draft order prepared by Mr O’Shannessy was as follows –
1. That within 14 days the applicant provide to the respondent;
a.copies of any written instructions, or her notes of her instructions, to her solicitor Peter Szabo (the applicant’s solicitor) up to the end of the hearing on 15 Feb 2018; and
b.copies of the applicant’s solicitor’s notes of the applicant’s instructions to him up to the end of the hearing on 15 Feb 2018.
c.copies of any written communications between the applicant and the applicant’s solicitor up to the end of the 15 Feb 2018 hearing.
On behalf of the wife, Mr St John QC said squarely that privilege had been waived in relation to the hearing on 15 February 2018.
The authenticated orders made 15 February 2018 appearing on the court portal were expressed to be final orders yet they were not expressed to have been made by consent. In discussions with Mr St John QC on 20 July 2020, Mr St John explained that apparent anomaly on the basis that any property order can only be made by the judge upon the judge being satisfied that it is just and equitable to make such an order. Mr St John QC submitted that consent was largely irrelevant as the judge needed, independently of consent, to form the view that the order was just and equitable. No doubt Mr St John QC had in mind the observations of the High Court in Harris v Caladine[12] in making that submission. Further, in the orders of the court made 15 February 2018 counsel appearing for the wife is recorded as Ms Richardson whereas other affidavit evidence revealed that Mr Richardson appeared for the wife. Be that as it may, it is utile to record the terms of those orders together with notation (b)[13] –
[12] (1991) 172 CLR 84.
[13] In previous decisions of which Harlen & Hellyar (No. 2) [2020] FamCA 413 is one I have expressed my disapproval of the practice of using notations to convey substantive propositions or submissions. This is an apt illustration of the problem.
UPON APPLICATION made to the Court AND UPON HEARING Ms Richardson of counsel for the applicant and Mr Szabo for the respondent
IT IS ORDERED THAT
1.(a). By 21 February 2018, the Respondent shall vacate the property at O Street, Suburb E Victoria and deliver up all keys to the Suburb E office of the Applicant's solicitors.
(b).The Applicant thereafter retain O Street, Suburb E to the exclusion of the Respondent in accordance with paragraph 7 and 20(a) of the Financial Agreement dated 10.02.2014 (“the Agreement”).
2.The Applicant shall retain to the exclusion of the Respondent possession of his luxury motor vehicle.
3. The Applicant shall retain to the exclusion of the Respondent all assets and property standing in the sole name of the Applicant, save that the Respondent shall retain all those items set out in ‘List A’ annexed hereto. For the avoidance of doubt the Applicant shall also retain the items set out in ‘List B’ annexed hereto and the Respondent shall maintain such items in ‘List B’ in the same good condition as at separation.
4. That all extant applications be otherwise dismissed.
NOTATIONS:
(a)The Respondent agrees to make an application to vary the Intervention order granted to her by the Melbourne Magistrates Court on 7 September 2017, to give effect to the orders set out above.
(b)The above orders are made without the Respondent admitting the validity of the Agreement.
The husband contended that by the entry into those consent orders the wife is estopped from making the claim she advances in this case, particularly about the 2014 agreement having regard to her agreement, by paragraph 1 of the consent orders, that she surrendered possession of O Street Suburb E.
Returning to the precise documents sought by the husband, on the assumption that there is force in Mr O’Shannessy SC’s contentions about waiver, Mr St John QC dissected each category of document sought. He did so in reverse order, beginning with the documents sought in paragraph 1(c).
Mr St John QC said the documents mentioned in paragraph 1(c) fell into two categories, namely first, those written communications between the wife and Mr Szabo up to the end of 15 February 2018 and second, written communications of what took place in court on 15 February 2018. So far as the first category was concerned, Mr St John said his client is unable to reliably read English and no documents exist. So far as the second category was concerned, Mr St John said the following in the application before me on 7 July 2020 –
MR ST JOHN QC: And as I understand the situation to be, if my friend is saying he wants notes of what took place during the court hearing, the evidence of my client, as I recall it, is she saw Mr Szabo on the 15th in distressed state, as my friend just said. And Mr Szabo and she have given evidence as to what she understood to be and what Mr Szabo understood to being dealt with.
Insofar as it relates to 15 February, I concede any such note should be – can be probably called for. The extent of the note, I do not know. If it’s a note simply that a certain amount is to be paid, I am fine for that viewing.... but I take no great issue even with that. But this suggestion that, somehow, my friend would be entitled to look, prior to the hearing, be it oral or written communications, in my submission, clearly does not arise. There has been no waiver. There has been a specific waiver of the event of 15 February at court. And I acknowledge that any document that relates – or evidences, instructions given or advice given on that day, would be discoverable. I acknowledge that.
When I sought clarification of the concession, Mr St John said an implied waiver had occurred. He said the following –
HIS HONOUR:   So that’s – just one second. That’s a very important point. You say there’s a specific waiver – have I got this right or – I just want to make sure I don’t incorrectly record what you’re saying. There’s a
MR ST JOHN QC:   No. Perhaps I will put it this way to your Honour. I acknowledge what Mr Szabo says, that there is an implied waiver by giving evidence about the instructions given and advice given on that day. There is an implied waiver. That is acknowledged.
HIS HONOUR:   Okay.
Lest the point needed any form of summation, I endeavoured to distil what seemed to be the wife’s relatively straightforward position. It was as follows –
HIS HONOUR:   I see. So let me just see if I understand your position. You concede that there’s an implied waiver about the advice given in – well, on 15 February, probably limited to in court. But prior to that date or after that date, you contest that there’s any such waiver. If notes were taken on 15 February, they should be discovered on the basis that they follow the implied waiver. Is that right, on both counts?
MR ST JOHN QC:   Yes.
HIS HONOUR:   Okay.
In reply, Mr O’Shannessy SC submitted that the relevant timeline for those contentions about waiver to be examined was the period between Mr Szabo’s retainer on 12 February 2018 and the application before Johns J on 15 February 2018 but not afterwards.

Examined in a temporal context

To properly examine the unusual facts of this application, it is necessary to put each phase of the conflicting factual position in a temporal context. That said, this was a contested interlocutory application so authority binding upon me requires that I should approach the task of making factual findings with great circumspection.[14]
[14] Marvel v Marvel (2010) 43 Fam LR 348, SS & AH [2010] FamCAFC 13, Deiter & Deiter [2011] FamCAFC 82, Eaby & Speelman [2015] FamCAFC 104, Banks & Banks [2015] FamCAFC 36, Salah & Salah (2016) 56 Fam LR 299, Redmond & Redmond [2014] FamCAFC 155, Rocacelli v Seles [2019] FamCA 105, Hall v Hall (2016) 257 CLR 490.
The narrative of events relevant to this application began in 2012. The events surrounding the execution of the agreement in December 2014 were pertinent. However, the focus of debate in respect of the appearance before Johns J on 15 February 2018 began with the retainer of Mr Szabo by the wife on 12 February 2018. It was common ground that on and from 12 February 2018 Mr Szabo was appointed as the wife’s legal representative on and from that date.
The details of the confidential communications that were exchanged as between client and solicitor on 12 February 2018 were none too easy to divine. The source of the affidavit evidence on point has been set out above. In paragraphs 2 and 3 of Mr Szabo’s affidavit sworn 11 December 2018 no evidence emerged that indicated that the subject of those two paragraphs contained information having the character of legal professional privilege. Those paragraphs did not record the wife’s request for legal advice or Mr Szabo’s provision of legal advice let alone did those paragraphs disclose the details of the advice given. Those paragraphs did not seem to me to raise matters ordinarily encountered in cases relevant to the maintenance or waiver of legal privilege. Given Mr St John’s concession concerning the status of information given to the court on 15 February 2018 that a waiver occurred, the evidence in paragraph 5 of Mr Szabo’s 11 December 2018 affidavit represented, on the wife’s own case, a waiver. But of what? Mr Szabo’s sentence went closest where he stated –
It was not discussed between us that the Orders my client was prepared to consent to on that day finalized anything other than the occupation of O Street and division of chattels.[15]
[15] Reference to “us” was a reference to Mr Szabo on the one hand and Mr Ashley Richardson of counsel on the other.
It seemed to me that the sentence just quoted coupled with the sentence that followed in paragraph 5 of Mr Szabo’s affidavit revealed that two matters were, on the balance of probabilities, discussed between Mr Szabo and Mr Richardson, namely –
a)that Mr Szabo had instructions to settle only the issue of the wife’s occupation of O Street and the division of chattels; and
b)Mr Szabo said the wife intended to challenge the validity of the financial agreement.
The orders made on 15 February 2018 by Johns J disposed of the wife’s occupation of O Street Suburb E. Pursuant to paragraph 1(b) of those orders Mr Hellyar retained possession of O Street “in accordance with paragraph 7 and 20(a) of the Financial Agreement dated 10.02.2014 (“the Agreement”).” Despite Mr Hellyar’s retention of the O Street property being expressed to be in pursuance of two paragraphs of the financial agreement made 10 February 2014, the second notation on page two of the orders of Johns J were “made without the Respondent[16] admitting the validity of the Agreement”. The husband, not the wife is the party propounding the validity of the 10 February 2014 financial agreement. It was most peculiar that she was, by that notation, reserving her position about any admission concerning the validity of the agreement. After all, the frontispiece of this litigation involves her contentions that on a variety of grounds, the 2014 agreement is null and void.
[16] The respondent in that application was Ms Harlen, the applicant in this proceeding.
One of the more intriguing aspects of this waiver application is that nowhere has the husband identified the information that was said to be captured by legal professional privilege. Not every item of information passing between a solicitor and his or her client is legally privileged even if that information is imparted and received during the currency of the relationship between solicitor and client. The ambit of the privilege was explained by Deane J in Baker v Campbell[17] in the following terms –
Once one recognizes that the principle underlying legal professional privilege is that a person should be entitled to seek and obtain legal advice without the apprehension of being prejudiced by subsequent disclosure of confidential communications and that the privilege is not confined to such communications as are made in the course of or in anticipation of litigation but extends generally to confidential communications of a professional nature between a person and his lawyer made for the purpose of obtaining or giving legal advice, common sense points to a conclusion that the principle should not be seen as restricted to compulsory disclosure in the course of such proceedings.
[17] (1983) 153 CLR 52.
In Mann v Carnell the plurality held that the ambit of the common law doctrine of legal professional privilege exceeds the provisions of s 118 and s 122 of the Evidence Act.
In my view, no information capable of attracting the description of “confidential communications of a professional nature between a person and his lawyer made for the purpose of obtaining or giving legal advice” was revealed in the paragraphs on which the husband relied as constituting the alleged waiver. I do not accept that some inconsistent act emerged by the way Mr Szabo conducted his client’s application before Johns J on 15 February 2018 so as to constitute a waiver.
I dismiss the husband’s application.

I certify that the preceding ninety (90) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Wilson delivered on 24 July 2020.

Associate:

Date: 24 July 2020