Lauren Fisher by her tutor Janice Fisher v Marin

[2007] NSWSC 473

CITATION:	Lauren Fisher by her tutor Janice Fisher v Marin [2007] NSWSC 473
HEARING DATE(S):	17 April 2007
JUDGMENT DATE :	15 May 2007
JUDGMENT OF:	Price J at 1
DECISION:	At paragraphs 19, 20, 26, 29
CATCHWORDS:	Client legal privilege - whether affidavits in support of an application to set aside an agreement to compromise constitute waiver - authority of tutor - competence and integrity of former legal advisors in issue - ss 122(1) - (4) of the Evidence Act.
LEGISLATION CITED:	Evidence Act 1995 (NSW) s 117(1)(b), s 122, s 122(1), s 122(2), s 122(4)
CASES CITED:	Adelaide Steamship Pty Ltd v Spalvins (1998) 81 FCR 360 Chen & Ors v City Convenience Leasing Pty Ltd & Anor [2005] NSWCA 297 Commissioner of Taxation v Rio Tinto Ltd (2006) 151 FCR 341 Mann v Carnell (1999) 201 CLR 1 Rhodes v Swithenback (1889) 22 QBD 577 Telstra Corporation Limited v BT Australasia Pty Limited (1998) 85 FCR 152
PARTIES:	Lauren Fisher by her tutor Janice Fisher Raymond Denis Marin and Another
FILE NUMBER(S):	SC 20247 of 2002
COUNSEL:	Mr R Ingram - Plaintiff Mr A J Sullivan QC and Mr J Downing - Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

PRICE J

15 MAY 2007

20247 of 2002 Lauren Fisher by her tutor Janice Fisher v
Raymond Denis Marin and Another

JUDGMENT

1 HIS HONOUR: The question for decision is whether the plaintiff has waived client legal privilege to the documents identified in a letter dated 16 April 2007 (the letter) from Blake Dawson Waldron to Commins Hendricks. The defendants acknowledge that the documents would otherwise be protected from their inspection by client legal privilege but contend that the privilege has been waived by the contents of affidavits sworn by the plaintiff’s tutor and her father. The tutor is the plaintiff’s mother. Although the question arises as a result of the issue of subpoenas, s 122 of the Evidence Act 1995 (NSW) (the EA) applies: see Chen & Ors v City Convenience Leasing Pty Ltd & Anor [2005] NSWCA 297 at [28] and [35]. Section 122(1) of the EA is to be construed as including implied waiver of client legal privilege within the meaning of “consent”: see Chen at [36], Telstra Corporation Limited v BT Australasia Pty Limited (1998) 85 FCR 152.

2 The present question is to be determined by reference to the terms of

s 122 of the EA which is as follows:

“122 Loss of client legal privilege: consent and related matters
(1) This Division does not prevent the adducing of evidence given with the consent of the client or party concerned.
(2) Subject to subsection (5), this Division does not prevent the adducing of evidence if a client or party has knowingly and voluntarily disclosed to another person the substance of the evidence and the disclosure was not made:
(a) in the course of making a confidential communication or

preparing a confidential document; or

(b) as a result of duress or deception; or

(c) under compulsion of law; or

(d) if the client or party is a body established by, or a person

holding office under, an Australian law – to the Minister,

or the Minister of the State or Territory, administering the

law, or the part of the law, under which the body is

established or the office is held.

(3) Subsection (2) does not apply to a disclosure by a person who was, at the time, an employee or agent of a client or party or of a lawyer unless the employee or agent was authorised to make the disclosure.
(4) Subject to subsection (5), this Division does not prevent the adducing of evidence if the substance of the evidence has been disclosed with the express or implied consent of the client or party to another person other than:

(a) a lawyer acting for the client or party; or

(b) if the client or party is a body established by, or a person holding an office under, an Australian law – the Minister, or the Minister of the State or Territory, administering the law, or the part of the law, under which the body is established or the office his held.

(5) Subsections (2) and (4) do not apply to:

(a) a disclosure by a client to another person if the

disclosure concerns a matter in relation to which the

same lawyer is providing, or is to provide, professional

legal services to both the client and the other person; or

(b) a disclosure to a person with whom the client or party

had, at the time of the disclosure, a common interest

relating to a proceeding or an anticipated or pending

proceeding in an Australian court or a foreign court.

(6) This Division does not prevent the adducing of evidence of a document that a witness has used to try to revive the witness’s memory about a fact or opinion or has used as mentioned in section 32 (attempts to revive memory in court) or 33 (evidence given by police officers).

3 By a Statement of Claim, the plaintiff claims that the first defendant, a medical practitioner, and the second defendant, a hospital, were negligent in effecting and managing her birth on 17 July 1985. As a consequence of the defendants’ negligence, the plaintiff claims she suffered hypoxic brain damage, neonatal seizures, the development of cerebral palsy and other injuries.

4 On 8 August 2006, the plaintiff served through her then solicitors Maurice Blackburn Cashman (MBC) an offer of compromise, which was accepted by the defendants by a letter dated 23 August 2006. Since that time, the plaintiff has changed solicitors and the court has been informed that the plaintiff disputes there is a valid agreement to settle on the grounds of “duress” and the physical and or mental state of the tutor.

5 Affidavits of Janice Fisher and Geoffrey Fisher sworn on 26 February 2007 and 20 March 2007 have been filed pursuant to orders made by McClellan CJ at CL. It is upon the contents of these affidavits that the defendants’ contention of waiver of client legal privilege is founded.

6 The defendants contend, broadly stated, that the overall effect of the affidavits is that the information and advice received by the tutor and the plaintiff’s father regarding issues of liability, causation and quantum prior to 2006 led them to believe that the plaintiff had a reasonable claim, the value of which had been assessed by the former solicitors at somewhere in the order of $16 million. In 2006, the advice as to prospects of success and quantum changed significantly so that an offer of compromise in the sum of $2.4 million plus costs was ultimately recommended by the legal advisors. The tutor and the plaintiff’s father dispute that they were properly advised as to the reasons for and consequences of serving the offer of compromise.

7 The plaintiff, the defendants submit, has opened up the issue of the communications regarding issues of liability, causation and/or quantum and that it would be unfair to deny access to the documents sought. “Issue Waiver” is said to be the foundation of the defendants’ claim, the plaintiff putting in issue the contents of documents, being otherwise confidential communications.

8 The plaintiff, broadly stated, concedes that there has been a waiver of the privilege in respect of some communications between the plaintiff and her former legal advisors being MBC and the three barristers retained by that firm. In accordance with that concession documents have been produced for inspection.

9 The substance of the present dispute is the extent of the documents asserted to be the subject of the waiver, which are identified in the letter.

10 Notwithstanding the concession as to waiver, the plaintiff submits that if Mr and Mrs Fisher have the ostensible authority to waive privilege, it would only be in relation to procedural matters and not matters of substance. The definition of client within s 117(1)(b) of the EA should be confined so far as concerns a tutor, the plaintiff argues, by the limitation of the tutor’s authority which is in effect for procedural matters. The defendants’ attempt to extend the waiver in a broad way, the plaintiff contends, “tramples” on the substantive rights of the plaintiff herself and does not come within the tutor’s authority.

11 The plaintiff is a person under legal incapacity and the provisions for the appointment of and removal of tutors are found in Division 4 of the Uniform Procedure Rules 2005.

12 A client is relevantly defined to include in s 117(1) of the EA:

“117 Definitions

(1) In this Division:

client includes the following:

….

(b) an employee or agent of a client;

(d) if, under a law of a State or Territory relating to persons
of unsound mind, a manager, committee or person

(however described) is for the time being acting in

respect of the person, estate or property of a client – a

manager, committee or person so acting.”

13 It is unnecessary, in my view, to dwell at length upon the plaintiff’s submission which I do not accept. If the definition of client within s 117(1)(b) of the EA is confined as the plaintiff contends in the case of a tutor to procedural matters, it is likely that very few of the communications between the tutor and the former legal advisors would be protected by client legal privilege. In any event, a tutor’s authority is not confined to procedural matters. It has been long established that a tutor has the power to compromise proceedings, although that power is limited for the benefit of the person under legal incapacity: see Rhodes v Swithenback (1889) 22 QBD 577. The affidavits are sworn by Mrs Fisher in support of an application which is intended to benefit the plaintiff and are made in accordance with her authority.

14 Mr Fisher, the plaintiff’s father and carer, has been involved in the obtaining of legal advice and in the litigation in concert with the tutor. It is evident that he has the implied authority to act on behalf of his daughter in the obtaining of that advice and of professional legal services relating to the ongoing proceedings. He is an agent of a “client” within s 117(1) (b) of the EA. As is the case with the tutor’s affidavits, the affidavits sworn by Mr Fisher support an application which is intended to benefit the plaintiff and are made in accordance with his implied authority.

15 “Issue Waiver” is a form of implied waiver. Implied waiver is brought about by “the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and the maintenance of the confidentiality”: Mann v Carnell (1999) 201 CLR 1 at [29]. The court is required to analyse the acts or omissions of the client that are said to be inconsistent with the maintenance of the privilege: Commissioner of Taxation v Rio Tinto Ltd (2006) 151 FCR 341 at [45]. In the present case, an analysis of the acts of the tutor and the plaintiff’s father which are asserted to establish the inconsistency in respect of each of the documents in the letter is required.

16 It is apparent from the affidavits of the tutor that she asserts her instructions to make the offer of compromise were obtained by her then legal advisors under coercion at a time she was not in a sufficiently strong frame of mind to consider the offer. She complains that she did not at any stage consider the offer to be satisfactory and in face of the pressure applied to her agreed to put the offer.

17 Criticism of the former legal advisors includes the advice given on 25 July 2006 that the case was high risk and only had a 30 per cent chance of success. It was understood by the tutor and Mr Fisher that the legal advisors considered that the tutor’s credibility would be a problem. Mr Fisher complains that after a re-reading of all reports he could not understand why he and Mrs Fisher had been told there was only a 30 per cent chance that the claim would succeed.

18 In support of the application to set aside the settlement agreement the tutor and Mr Fisher have voluntarily put in issue the competence and the integrity of her former legal advisors at the time the offer of compromise was made. The conduct of the former legal advisors has plainly been raised. I am cognisant that findings of waiver of privilege may prejudice the plaintiff’s case should the settlement be found to be invalid or not be approved. The assertions of misconduct, however, are of such gravity that they are unable to be answered by the defendants without access to the material available to the former legal advisors. It is inconsistent in these circumstances being informed by considerations of fairness, to maintain the confidentiality of communications upon which the legal advice has been founded.

19 Falling within the otherwise confidential communications of which I am satisfied there has been a loss of privilege by the operation of s 122 (1) of the EA are instructions and proofs of evidence from Mrs Fisher, preliminary assessments of liability, communications between the legal advisors and between the legal advisors and herself. By reference to the letter, I am satisfied that client legal privilege has been waived for the following communications:

2 Letter from CS to Mr and Mrs Fisher re experts views dated 20 April 2001;
3 Letter from CS to Mr and Mrs Fisher re experts views dated 8 November 2000;
4 Factual instructions from Mrs Fisher dated 1 October 2002;

6 Proof of evidence of Mrs Fisher (two copies);

7 Factual instructions from Mrs Fisher 1 October 2002;

9 Instructions from Mrs Fisher dated about 1 October 2002;

10 Letter from CSR to Mr Levy re preliminary assessment of liability evidence and table of solicitors comparison of reports dated 10 February 2005;
12 Letter from MBC to Mr Levy enclosing affidavits and proof of evidence of Mrs Fisher dated 3 November 2005.

20 Documents identified in the letter include material obtained by the South Australian solicitors who were consulted by the tutor and Mr Fisher before Charlton Shearman solicitors were engaged in December 2000. Charlton Shearman merged with MBC in July 2005. Instructions and statements given by the tutor to the South Australian solicitors and a medical report obtained by them, appear from the list of the documents produced by Mr Levy SC to have been provided to senior counsel. Similarly, from the list of the documents produced by Mr O’Keefe of counsel, it is apparent that conference notes made by the South Australian solicitors had been provided to him. Client legal privilege to these otherwise confidential communications has been waived as they form part of the material available to the former legal advisors in the formation of the legal advice about which the tutor complains. I am satisfied that client legal privilege has been waived by the operation of s 122(1) of the EA in respect of following confidential communications produced by Mr Levy SC:

5 Handwritten statement of Mrs Fisher 15 July 1985;

8 Proof of evidence of Janice Fisher dated 1986;

13 Report to SA solicitors from treating doctor dated 3 December 1998;

19 Solicitors conference notes with Mr and Mrs Fisher.

21 Item 11 in the letter identifies a schedule of Mrs Fisher’s medical history. A concession is made by the plaintiff that there has been a waiver of the tutor’s physical condition which is confined to her heart condition and its affect upon her mental health around the time that the offer of compromise was made. One of the complaints made by the tutor and Mr Fisher is to the reference by the legal advisors at the meeting on 25 July 2006 to the tutor being an “anxious witness”. At paragraph 41 of the affidavit of 26 February 2007, the tutor recalls thinking that she “was not an anxious patient as had been expressed by Mr Levy”. She relates that “it was Mr Levy who requested in mid 2005 that [she] see a psychiatrist to repute (sic) the allegations made by Doctor Marin that [she] was suffering from a chronic anxiety disorder prior to or at the time of [the plaintiff’s] birth”.

22 The tutor has voluntarily raised as an issue the assessment by Mr Levy SC that she was an anxious patient. This was a consideration, which she and Mr Fisher understood was taken into account in the assessment of the prospects of success in the case. The maintenance of the confidentiality of a communication upon which such an assessment may have been made by Mr Levy SC is inconsistent, taking into account considerations of fairness, with the intentional raising of the issue by the tutor. The tutor has waived more than the plaintiff contends. The schedule is in the material produced by Mr Levy SC. I conclude that there has been a loss of the privilege by the operation of s 122(1) of the EA of the otherwise confidential communication being item 11.

23 Communications relating to expert reports “not served” are identified in items 1 and 16. The plaintiff contends that the waiver of client legal privilege does not extend to unserved reports as an assessment of the prospects of success is made upon the material to be before a court at a contested hearing. With this submission I agree. I am not satisfied that there has been a loss of privilege by “issue waiver” in respect of these communications.

24 The defendants argue that Mr Fisher had disclosed the substance of the communications when he made reference at paragraphs 53 and 55 of his affidavit of 26 February 2007 to re-reading “all the reports” and there has been a loss of privilege by the operation of s 122(2) or 122(4) of the EA. As was observed by the Full Court of the Federal Court in Adelaide Steamship Pty Ltd v Spalvins (1998) 81 FCR 360 at 371, the test for determining whether there has been a disclosure of the “substance of the evidence” is a quantitative one. Sections 122(2) and 122(4) are not concerned with principles of “fairness” which may apply to implied waiver. Mr Fisher’s references to “all of the reports” do not disclose to any degree the contents of the reports he re-read. He has not disclosed the substance of the reports and the privilege has not been waived in respect of the unserved reports.

25 As requested by the parties, I have inspected various documents about which it is said that the description in the schedule is insufficient to enable a determination to be made as to the waiver of the privilege. The documents inspected include items 16 and 19 of which I have made mention.

26 Using the numbering in the letter, I am satisfied that there has been a waiver of client legal privilege by the operation of s 122(1) of the EA of the following communications:

14 Item 3 memorandum of advice of Mr Levy re approval 04/10/2006

Item 7 letter from MBC to Mr Levy requesting advice 20/09/2006
Item 10 letter from Mr Levy to MBC enclosing advice re approval 04/10/2006.

27 Although the memorandum of advice was provided by Mr Levy SC after the offer of compromise was accepted, it was prepared, it seems, at the request of the tutor and summarises the principal reasoning behind the formulation of the plaintiff’s settlement offer. The advice is relevant to the issues raised by the tutor and Mr Fisher concerning the competence and integrity of the plaintiff’s legal advisors in recommending the proposed settlement to the tutor. Maintenance of the confidentiality of the advice is inconsistent, taking into account considerations of fairness, with the conduct of the tutor.

28 In their affidavits, the tutor and Mr Fisher question the adequacy of the preparation of the plaintiff’s case for hearing. Mr Fisher states (at para 58 affidavit sworn 26 February 2007):

“58. The cancellation of this meeting [of 4 September 2006] was extremely disappointing as our questions about the lack of preparation of the case would not be answered. It also increased the concern I had about the way the settlement figure had been arrived at and the reason that we had been pressured into agreeing to it.”

29 The lack of preparation of the plaintiff’s case is plainly put in issue as a possible reason for the recommendation of an otherwise inadequate settlement amount and coercion to make the offer of compromise. Taking into account considerations of fairness, maintenance of the confidentiality of letters from Mr O’Keefe to MBC identifying the matters required to prepare the case for hearing is inconsistent with the conduct of the tutor. I conclude there has been a waiver of client legal privilege by the operation of s 122(1) of the EA in respect of the following communications:

Item 31 letter from Mr O’Keefe to MBC re preparation for hearing

9/8/06

Item 38 letter from Mr O’Keefe to MBC re preparation for hearing 26/07/2006

30 C. OTHER DOCUMENTS

MBC medical and expert correspondence

The tutor in her affidavit sworn on 26 February 2007 [at para 57] refers to her investigations revealing “serious omission from the case, not the least of which was a failure to obtain a pharmacologist report”. Both the tutor and Mr Fisher express their concern that a pharmacologist’s report was not obtained in response to a report obtained by the defendants from Professor Lumbars. Mr Fisher recalls reading Professor Lumbar’s report which he states was the first report which exonerated Syntocinon as a factor in the plaintiff’s condition. One of the questions which he wished to ask at the proposed meeting on 4 September 2006 concerned the lack of a pharmacologist’s report.

31 The adequacy of the preparation of the plaintiff’s case is once again placed in issue. Maintenance of the confidentiality of documents in the file of MBC material to this issue is inconsistent taking into account considerations of fairness with the conduct of the plaintiff. I conclude there has been a waiver of client legal privilege by the operation of s 122(1) of EA in respect of these documents.

32 I am not satisfied that the privilege has been waived in respect of item 17 – draft affidavit of Mr Peter King for approval (undated). The document is unsworn and prepared after the offer of compromise was accepted. As stated in paragraph 27, the memorandum of advice provided by Mr Levy SC summarises the principal reasoning behind the formulation of the offer of compromise.

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