Hudson and Acland
[2017] FamCA 640
•24 August 2017
FAMILY COURT OF AUSTRALIA
| HUDSON & ACLAND | [2017] FamCA 640 |
| FAMILY LAW – PRACTICE AND PROCEDURE – Where an application for the production of documents is opposed due to legal professional privilege – Where it is contended that privilege has been waived by conduct – Where the relevant law is common law as the privilege claimed is in relation to production of documents rather than admission into evidence – Where there is no inconsistency between the conduct of the applicant and the maintenance of confidentiality attracted to communications with his lawyers – Where the application is dismissed. |
Evidence Act 1995 (Cth)
Family Law Act 1975 (Cth) ss 4AA, 90SM
Bennett v Chief Executive Officer of Australian Customs Service[2004] FCAFC 237; (2004) 140 FCR 101
Ferella & Anor v Official Trustee in Bankruptcy[2010] FCA 766; (2010) 188 FCR 68
Commissioner of Taxation v Rio Tinto Ltd[2006] FCAFC 86; (2006) 151 FCR 341.
Commonwealth of Australia v Sanofi (formerly Sanofi-Aventis) (No 2) [2017] FCA 711
Macquarie Bank Limited v Arup Pty Limited[2016] FCAFC 117
Mann v Carnell [1999] HCA 66
| APPLICANT: | Mr Hudson |
| RESPONDENT: | Mr Acland |
| FILE NUMBER: | SYC | 2943 | of | 2013 |
| DATE DELIVERED: | 24 August 2017 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Loughnan J |
| HEARING DATE: | 10 August 2017 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Kearney SC |
| SOLICITOR FOR THE APPLICANT: | York Law Family Law Specialists |
| COUNSEL FOR THE RESPONDENT: | Mr Richardson SC |
| SOLICITOR FOR THE RESPONDENT: | McLachlan Thorpe Partners |
Orders
The Application in a Case filed 17 July 2017 by the respondent is dismissed.
The subpoena dated 1 August 2017 addressed to the applicant’s solicitors, is set aside.
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 Hudson & Acland 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 SYDNEY |
FILE NUMBER: SYC2943 of 2013
| Mr Hudson |
Applicant
And
| Mr Acland |
Respondent
REASONS FOR JUDGMENT
Before the Court is an application by Mr Acland for production of documents by Mr Hudson. The parties are respectively the respondent and the applicant in proceedings for property settlement arising from the breakdown of their de facto relationship.
Production is opposed because the documents in question are the subject of a claim for legal professional privilege. It is the contention of the respondent, that the applicant has waived that privilege.
Although the respondent is the applicant in respect of this interlocutory issue, I will refer to the parties by reference to their roles in the substantive proceedings. The property settlement proceedings are fixed for final hearing over 17 days commencing on 7 November 2017.
The Application
The respondent’s Application in a Case was filed on 17 July 2017 and apart from costs, seeks the following order:
1.That within seven (7) days of the date of this order [Mr Hudson] (the Applicant) do, and shall further do all acts and things necessary to cause the solicitor for the Applicant (York Family Law) to, produce to the exhibits office of the Sydney Registry of the Family Court of Australia, unredacted and unaltered, all letters, emails, file notes, and other documents and records as may have come into existence between the date of York Family Law being instructed in these proceedings and 22 May 2017, that record communications as between the Applicant and his solicitors (or any employee of the York Family Law), in any form, touching upon any fact relevant to any aspect of the legal characterisation of the relationship between the Applicant and Respondent, and the factors relevant thereto as identified in section 4AA Family Law Act, 1975 (Cth), as may be relevant to inform a conclusion as to when a de facto relationship commenced between the parties pursuant to that section and thereafter the Respondent’s legal representatives shall be at liberty to inspect such documents/records produced.
The applicant seeks that the application be dismissed.
For reasons that are not clear, in addition to the application for production, the respondent sought and obtained the issue of a subpoena on 1 August 2017, addressed to the solicitors for the applicant. The subpoena relevantly seeks the production of:
…
2.All letters, emails, file notes, and other documents and records (un-redacted and unaltered) between York Family Law Specialists Pty Ltd (known as York Law) and the Applicant as may have come into existence between the date of York Law being instructed in these proceedings and 22 May 2017.
3.All record communications as between the Applicant and his solicitors (or any employee of the York Law), in any form, touching upon any fact relevant to any aspect of the legal characterisation of the relationship between the Applicant and Respondent, and the factors relevant hereto.
The applicant objects to the subpoena.
The Background Facts
The parties are engaged in proceedings for settlement of property pursuant to s 90SM of the Family Law Act 1975 (“the Act”). It is an agreed fact for the purposes of those proceedings that the parties were in a de facto relationship to which s 90SM applies. However, the parties disagree as to the date of commencement of that relationship and that will be an issue to be determined in the substantive proceedings.
In an affidavit affirmed on 6 November 2015, the applicant said:
5.[Mr Acland] and I commenced an exclusive relationship in early 2000. [Mr Acland] and I commenced to live together (cohabitation) around August 2002 ...
(Emphasis added)
On 22 May 2017 the applicant affirmed a further affidavit in which he said:
8.[Mr Acland] and I commenced to live together in or around March 2000 …
…
16.In my first affidavit filed in these proceedings in support of my application for partial property settlement in November 2015, I recorded that we commenced an exclusive relationship in early 2000 and that we commenced to live together (cohabitation) around August 2002. At that time of writing that Affidavit, I was under the misapprehension that until we lived together in the one home that we considered as “jointly ours” as opposed to “his home” or “my home” that cohabitation did not commence.
(Emphasis added)
It is argued for the respondent that:
·the time of the commencement of the parties’ cohabitation is intrinsic to a relevant and important issue in the case;
·the applicant explains the two different versions of his evidence by referring to his misapprehension at the time of the earlier affidavit about the meaning of cohabitation;
·at all relevant times the application was advised by his solicitor, who prepared both affidavits and as the misapprehension goes to a conclusion involving the application of legal principle – those events strongly infer that the legal advice that he received (which itself was based upon the facts revealed by his instructions) was overwhelmingly likely to have influenced or informed his state of mind; and
·for those reasons the law will imply a waiver of the privilege that was otherwise available to him.
The Legal Position
It is common ground that as the privilege is claimed in relation to production of documents rather than their admission into evidence, the relevant law is the common law and not the Evidence Act 1995 (Cth).
In Macquarie Bank Limited v Arup Pty Limited[2016] FCAFC 117, the Full Court of the Federal Court of Australia (Middleton, Robertson and Gleeson JJ) dismissed an appeal against a refusal to make orders based on an implied waiver of legal professional privilege. The Court discussed the question of waiver of privilege and the relevant authorities in the following terms:
APPLICABLE PRINCIPLES
23.The approach of the primary judge was in accordance with established principles and correct on the basis of the evidence before him.
24.It was common ground that the common law applied to the present interlocutory application. As the primary judge acknowledged, the guiding principle to be applied in determining whether waiver of legal professional privilege occurs at common law is that stated in Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1 (‘Mann v Carnell’), wherein the majority held at [29]:
Waiver may be express or implied ....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.
25.The governing principle that underpins implied waiver has undergone a process of judicial evolution. In Attorney-General (NT) v Maurice [1986] HCA 80; (1986) 161 CLR 475 at 481, 487, 492, 497, the High Court held that implied waiver occurs when, by reason of some conduct on the privilege holder’s part, it becomes unfair to maintain the privilege. However, ‘fairness’ was subsequently abandoned as the touchstone of implied waiver by the High Court in Mann v Carnell.
26.The Full Court of the Federal Court applied Mann v Carnel in Commissioner of Taxation v Rio Tinto Ltd[2006] FCAFC 86; (2006) 151 FCR 341. In that case, the Court held at [52]:
...where issue or implied waiver is made out, the privilege holder has expressly or impliedly made an assertion about the contents of an otherwise privileged communication for the purpose of mounting a case or substantiating a defence. Where the privilege holder has put the contents of the otherwise privileged communication in issue, such an act can be regarded as inconsistent with the confidentially that would otherwise pertain to the communication.
27.As referred to by the primary judge, the Court further observed at [65]:
As the previous examination of the authorities shows, the question is not whether the Commissioner has put his state of mind in issue but whether he has directly or indirectly put the contents of the otherwise privileged communications in issue in the litigation, either in making a claim or by way of defence. Put another way, to adapt Allsop J’s language in DSE, has the Commissioner (being the privilege holder) made an assertion as part of his or her case in the litigation that lays open the privileged documents to scrutiny, with the consequence that an inconsistency arises between the making of the assertion and the maintenance of the privilege?
28.The correct approach was succinctly described by Yates J in Ferella & Anor v Official Trustee in Bankruptcy[2010] FCA 766; (2010) 188 FCR 68 at [65] in the following terms:
...However the question is not simply whether the holder of the privilege has put that person’s state of mind in issue but whether that person has directly or indirectly put the contents of the otherwise privileged communication in issue: see [Rio Tinto] at [65]. Indeed, even the fact that the holder of the privilege makes clear that the advice was relevant or contributed to a particular course of conduct would not be sufficient to waive the privilege unless, possibly, the contents of the legal advice (and not merely the fact of the advice) are specifically put in issue by relying on the contents of the advice to vindicate a claimed state of mind: [Rio Tinto] at [67].
29.In determining whether there has been an implied waiver of privilege, the Court’s focus will be on whether there has been conduct that is inconsistent with the maintenance of confidentiality in the communication over which privilege is asserted. An assessment of whether there has been an implied waiver will be informed by considerations of forensic unfairness.
30.Whilst not to be treated as a statutory formulation, in DSE (Holdings) Pty Ltd v Intertan Inc[2003] FCA 384; (2003) 127 FCR 499 (‘DSE’), Allsop J (as his Honour then was) described (at [58]) an implied waiver as arising when:
... the party entitled to the privilege makes an assertion (express or implied), or brings a case, which is either about the contents of the confidential communication or which necessarily lays open the confidential communication to scrutiny and, by such conduct, an inconsistency arises between the act and the maintenance of the confidence, informed partly by the forensic unfairness of allowing the claim to proceed without disclosure of the communication.
31.As the primary judge recognised, a pleading of legal advice may be sufficient to give rise to a waiver of privilege, however a pleading is not necessary for waiver to occur. To this effect, in Hancock v Rinehart[2013] NSWSC 1978, Brereton J noted (at [22]) that the pleading in that case did not deploy or even refer to legal advice or its effect. His Honour noted that it was nonetheless open to conclude that privilege had been waived if other factors of the case warranted such a finding.
32.As stated in Council of the New South Wales Bar Association v Archer [2008] NSWCA 164; (2008) 72 NSWLR 236 at [48], by Hodgson JA, with whom Campbell JA agreed:
It is not enough to bring about a waiver of client legal privilege that the client is bringing proceedings in which the content of the privileged communications could, as a reasonable possibility, be relevant and of assistance to the other party. For the client to do this is not inconsistent with the maintenance of the privilege, and does not give rise to unfairness of the type in question. What would involve inconsistency and relevant unfairness is the making of express or implied assertions about the content of the privileged communications, while at the same time seeking to maintain the privilege. In this respect, it may be sufficient that the client is making assertions about the client’s state of mind, in circumstances where there were confidential communications likely to have affected that state of mind.
(Emphasis added.)
33.It was contended by Macquarie that these principles have particular application where a party pleads its understanding of the legal effect of a contract or agreement. In this regard Macquarie relied upon Vic Hotel Pty Ltd v DC Payments Australasia Pty Ltd[2015] VSCA 101; (2015) 321 ALR 191 (‘Vic Hotel’), where the Victorian Court of Appeal found an implied waiver of privilege in a context where the pleaded allegation put in issue another party’s state of mind as to the existence of legal rights. Dixon AJA (with whom Mandie and Beach JJA agreed) noted (at [46]):
I accept that merely putting a state of mind in issue will not, of itself, give rise to waiver of privilege in respect of legal advice that is relevant to the existence of the state of mind. But that is not this case. The state of mind that is put in issue concerns an understanding of legal rights, not simply knowledge of terms recorded in a contract.
…
In Commonwealth of Australia v Sanofi (formerly Sanofi-Aventis) (No 2) [2017] FCA 711, the Federal Court of Australia (Nicholas J) was dealing with an argument in aid of an application for production about an implied waiver of legal professional privilege as a result of disclosures made by a respondent at a meeting with the applicant. His Honour addressed some of the authorities referred to above but included in a discussion of the relevant principles was the following:
“….
7.Fourthly, the disclosure of the gist or substance of legal advice may give rise to an implied waiver of the whole of it. As Tamberlin J explained in Bennett v Chief Executive Officer of Australian Customs Service[2004] FCAFC 237; (2004) 140 FCR 101 at [13]:
Various expressions are used in the formulation of principles relating to waiver of legal professional privilege, such as references to “the substance”, “effect”, or “content” of the advice. The weight of the authorities, in my view, supports the conclusion that the disclosure of the conclusion reached in or course of action recommended by, an advice can amount to waiver of privilege in respect of the premises relating to the opinion which has been disclosed, notwithstanding that this reasoning is not disclosed. By way of illustration, if there is a disclosure that a client has been advised that interpretation “A” is preferable to interpretation “B” of a legislative provision, then even if there is no disclosure of the reasoning leading to that conclusion, the reasoning and content of the advice may be waived, including the factual premises and circumstances leading to that conclusion.”
8.In Osland v Secretary,Department of Justice (2008) 234 CLR 275 Gleeson CJ, Gummow, Heydon and Kiefel JJ made clear at [44]-[49] that the question whether a limited disclosure of the existence and effect of legal advice in a given context is inconsistent with maintaining the privilege will depend upon the circumstances of the case and matters of fact and degree.
Discussion
Turning to the arguments made by the parties.
It is submitted for the respondent that the subject matter of the evidence in question goes to a relevant and important issue. The issue addressed in that evidence is the time of the commencement of the parties’ cohabitation.
I assume that there is or could be said to be some relevance to the commencement of the parties’ cohabitation for a finding about the duration of their de facto relationship. However, as the legislation makes clear, there is no necessary connection between those concepts. Section 4AA of the Act provides a definition of de facto relationship which relevantly includes the prescription: “(c) having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis”. One of the matters that may be relevant to deciding whether there is a de facto relationship for the purposes of proceedings under s 90SM is the nature and extent of their common residence. I accept that the timing of the commencement of cohabitation could have a bearing on the nature and extent of the common residence of the parties, which in turn could be relevant to a finding as to the time they commenced their relationship “as a couple living together on a genuine domestic basis”. That matter is further complicated in this case because the fact of the parties’ de facto relationship arises not from a Court finding but as an agreed fact in the proceedings. Therefore the features and elements that have gone to define this de facto relationship are only known to the parties. Presumably, if it is possible to make a finding about the extension of the relationship beyond the agreed duration, that may involve identifying and teasing out the elements of that agreement.
Once the jurisdictional requirements are met, the relevance of the duration of the relationship in question to proceedings for property settlement will depend on the facts of the case. Much of the focus of property settlement proceedings is on contributions and they can be made before, during and after the period of the relationship. That said, there could be some relevance to the time of commencement of cohabitation for findings about contributions. The value of initial financial contributions under s 90SM(4(a) and their import for the overall assessment of contributions may be effected depending on whether a relationship commenced on one date or a date two years earlier, for example. The period of residence under one roof could be relevant to findings about contributions to the family (s 90SM(4)(c)).
How important the resolution of the dispute about the time of the commencement of the parties’ cohabitation will be, however, remains to be seen but I accept that the issue is relevant.
The applicant has given inconsistent evidence about the commencement of the parties’ cohabitation. He explains that difference by reference to an asserted misapprehension at the time of the earlier affidavit as to the meaning of cohabitation. I do not necessarily agree that that evidence was a conclusion of facts applied to legal criteria. I am not aware, for example, of any relevant legal criteria going to the meaning of cohabitation.
At the time of swearing both affidavits, the applicant was apparently advised by his solicitor. An inference is available therefore that the source of the correction of the applicant’s misapprehension was his solicitor. However, on the applicant’s deposition to date, there is no way to be confident about that.
Turning to the applicant’s submissions, the waiver of legal professional privilege can occur without reference to any confidential communication or to having relied on any such communication. The reference in Mann v Carnell includes reference to waiver implied by conduct. As is referred to above, an inference is available that the source of the correction of the applicant’s misapprehension was his solicitor. I agree that the applicant putting his state of mind in issue is not of itself sufficient to constitute a waiver of privilege (see Commissioner of Taxation v Rio Tinto Ltd at [52] and Ferella & Anor v Official Trustee in Bankruptcy at [65]). However, in the circumstances of this case it cannot be said that the applicant’s opinion about aspects of his relationship with the respondent as at November 2015 and May 2017 are not relevant. They are unlikely to be determinative of any important issue but for the reasons mentioned above, they may be relevant.
On the present facts I am not satisfied that by the applicant’s deposition in May 2017, he has waived legal professional privilege in relation to advice and other communications preceding the preparation of the 25 May 2017 affidavit.
Conclusion
The commencement of the parties’ cohabitation is a relevant issue. The importance of it cannot be known at this stage and it may prove to be of little or no importance. The change in the applicant’s apprehension about the concept of cohabitation could have been effected or influenced by his solicitor but that is not established by the applicant’s statement nor by a necessary inference arising from it. I accept however, that as Tamberlin J explained in Bennett v Chief Executive Officer of Australian Customs Service above, even if there is no disclosure of the reasoning going to the correction of the applicant’s misapprehension, the conclusion about cohabitation may be sufficient for a waiver of privilege.
In my view, however, there is no inconsistency between the conduct of the applicant and maintenance of the confidentiality attracted to communications with his lawyers. The only probative evidence the applicant can give is about the facts. His apprehension about the meaning of a term will not be probative. He is qualified however, to give evidence about his living arrangements, including about any persons he lived with. There is nothing in his deposition and his maintenance of privileged communications with his lawyers that would prevent his evidence about those facts being fairly and comprehensively tested.
I appreciate that this or a related issue in respect of the admission of evidence may arise in the future but the Application in a Case filed 17 July 2017 will be dismissed and the subpoena dated 1 August 2017 addressed to the applicant’s solicitors, will be set aside.
I certify that the preceding twenty-six (26) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 24 August 2017.
Associate:
Date: 24 August 2017
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