Laws v GWS Machinery Pty Ltd and 2 Ors; Laws v GWS Machinery Pty Ltd

[2006] NSWSC 492

CITATION:	Laws v GWS Machinery Pty Ltd & 2 Ors; Laws v GWS Machinery Pty Ltd & Anor [2006] NSWSC 492 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	11 May 2006
JUDGMENT DATE :	11 May 2006
JURISDICTION:	Common Law
JUDGMENT OF:	Rothman J at 1
EX TEMPORE JUDGMENT DATE:	05/11/2006
DECISION:	1. Document remains privileged; 2. Tender rejected.
CATCHWORDS:	Evidence - legal professional privilege - waiver - mistake in disclosure - implied or construcitve disclosure - confidential communications - Adverse possession of documents - whether client knows a third person has possession
LEGISLATION CITED:	Evidence Act
CASES CITED:	Ampolex Ltd v Perpetual Trustee Co (Canberra) (1996) 40 NSWLR 12 DPP v Kane (unreported, NSWSC, 10 September 1997) BT Australia Pty Ltd v State of NSW [1998] FCA 295
PARTIES:	20076/2002: P - John Rodney Laws D1 - GWS Machinery Pty Ltd D2 - Motocov D3 - Thomas John Laws 20084/2002 P - Thomas John Laws D1 - GWS Machinery Pty Ltd D2 - Motocov
FILE NUMBER(S):	SC 20076/2002; 20084/2002
COUNSEL:	20076/2002: P - Mr Wheelahan SC with Mr Frame D1 - Mr S Campbell SC with Mr Perry D2 - Mr R Gray D3 - Mr Doherty SC wtih Mr Morgan 20084/2002: P - Mr Doherty SC with Mr Morgan D1 - Mr S Campbell SC with Mr Perry D2 - Mr R Gray

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

Rothman J

11 May 2006

John Rodney LAWS v GWO Machinery Pty Ltd & 2 Ors

20076/2002

Thomas LAWS v GWS Machinery Pty Ltd & Anor

20084/2002

JUDGMENT

1. HIS HONOUR: This judgment deals with the principles relating to waiver of legal professional privilege and the operation of s.122 of the Evidence Act.

2. The first defendant seeks to tender a document (MFI:D1-10) which, the parties now accept is a note of instructions given by Mr Laws Senior to his then solicitor. Mr Doherty SC, Counsel for Mr Laws Senior, opposes the tender of the document in evidence. The document is headed “Statement of Facts” and is part of an exhibit tendered on the voir dire.

3. Evidence has been adduced on the voir dire to the effect that this document (D1-10) was mistakenly provided to solicitors for the first defendant in answer to correspondence. The correspondence sought material that had been provided to one of the experts and upon which that expert was to base his opinion. The evidence that is before the Court on the voir dire, and otherwise, is that the material that was in fact provided to the expert did not include the MFI.

4. During the course of the proceedings, questions have been asked relating to MFI D1-10 on the mistaken basis that the document was in fact a document provided to the expert as outlined.

5. Mr Campbell SC, who appears with Mr P Perry for the first defendant, concedes that the notes, which form the document, were privileged at the time they were made. The notes were and are a record of a confidential communication between solicitor and client or vice versa. The document is, pursuant to s.118 of the Evidence Act, privileged.

6. The situation is complicated by the relationship between the parties in these proceedings and their solicitors. The original communication was between Mr Laws Senior (the father of Mr John Laws) and Lamrocks. At the time Lamrocks were acting for both Mr Laws Senior and Mr John Laws. Because of perceived or actual conflict, Lamrocks ceased acting from Mr Laws Senior and his files were passed to others. Lamrocks continue to act for Mr John Laws. It seems that when the files were passed to the new solicitors this document was retained by Lamrocks. It may be that the document was, and is, regarded as instructions in the proceedings regarding Mr John Laws (and it may have been compiled in those circumstances: see s.124 of the Evidence Act). It should be acknowledged that the evidence, at this stage, is that Mr John Laws has no recollection of the incident that caused his injury, which caused significant brain damage, and he suffers some significant memory loss.

7. Mr S Campbell SC, discriminates between 4 relevant communications or circumstances, two of which would not, he concedes, amount to a basis upon which the document could be adduced.

8. The 4 circumstances are: the communication between Mr Laws Senior and his then solicitors, Lamrocks and/or the notes of that communication; the retention, by Lamrocks, of the document adverse, it is said, to the confidential nature of the document in the hands of Mr Laws Senior; the disclosure of the document by Lamrocks to the solicitors for the first defendant; and, lastly, the circulation without objection of the document at the Bar table and in Court (including its marking for identification and cross-examination upon it).

9. The two circumstances upon which Mr Campbell SC does not rely are the original communication by Mr Thomas Laws to Lamrocks and the disclosure by Lamrocks by mistake to Moray & Agnew Solicitors for the first defendant. The two on which Mr Campbell does rely are the circulation in Court and the implied or constructive disclosure (so described) said to have occurred after Lamrocks ceased to act for the plaintiff, Mr Laws Senior.

10. The implied or constructive disclosure, as I understand the submission, is put on the basis that notwithstanding that the original communication is privileged, it loses its privileged status because it was retained by Lamrocks, the solicitors acting for the first plaintiff.

11. Mr S Campbell SC concedes that in deciding whether the document is admissible the requirements of the Evidence Act are determinative.

12. On 2 May 2006, I delivered judgment in these proceedings on an issue associated with privilege and what was said to be disclosure. I reiterate the principles that I there adumbrated and the references to the definitions in s.117 of confidential communication and confidential document, a reference to s.118 dealing with confidential communications between client and lawyer and the references to ss.2 and ss.5 of s.122, which deals with waiver or disclosure. In this instance, Mr Campbell SC relies on ss.4 of s.122, which, Mr Campbell submits, has the effect of overcoming what would otherwise be a prohibition on the adducing of the evidence.

13. Subsection 4, like ss.2 of s.122, is made subject to ss.5. Subsection 5 makes clear that the two earlier subsections, ss.122(2) and (4), do not apply to 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.

14. In these circumstances, Lamrocks were acting for both plaintiffs for a short time, and it was during that period that the disclosure occurred. The disclosure was by one client to another client, both utilising the same solicitors.

15. In those circumstances, ss.5 would apply to the original disclosure. So much is conceded by Mr Campbell.

16. The argument in relation to the implied or constructive disclosure fails not on the basis of any implied or constructive aspect but because of the nature of the disclosure that is required by ss.2 and The nature of the disclosure that is required is not the disclosure of the document but the disclosure of the substance of the evidence. In other words, it is the content of the evidence with which ss.2 and ss.4 is concerned.

17. It is impossible, if the subsections apply to the substance of the evidence, for the substance of the evidence ever to have been retaken from a former solicitor by the client. In other words, once the substance has been disclosed, it always remains in the mind of any former solicitor or the other client and therefore no argument can succeed which relies upon a failure by the original client to prevent “the documents” remaining in the possession of the original solicitors, once there was a change in solicitor.

18. The other aspect of the submission on constructive disclosure to which reference must be made is that, if the submission were correct, s.124 would seem to be otiose. Because s.124 allows one client to disclose a communication by another client in circumstances similar to that which is before the Court today, if, as Mr Campbell SC argues, there is an implied or constructive waiver, s.124 would be unnecessary.

19. Alternatively, the “adverse possession” by the former solicitors of the documents, if such possession were to effect a waiver, would require knowledge, by the former client or new solicitors, of the retention of the documents by the former solicitors for it to bind the client. In other words, for the possession to be sufficiently adverse to effect waiver, the client or his agents must know that a third person has possession. If a circumstance such as “adverse possession” were to amount to waiver, there must be some knowledge in the client of the circumstance.

20. I next deal with the circulation at the Bar Table or in Court. The circumstances of that circulation need to be explained. As previously stated, the document was disclosed by Lamrocks to Moray & Agnew on the mistaken view that the Statement had been provided to an expert. Moray & Agnew act for the first defendant. Mr S Campbell SC then asked questions by reference to the Statement but without disclosing its contents.

21. The mistake was discovered when the document was put to the expert and he indicated that he had not previously seen the document. The document was then provided by counsel for the first defendant to counsel for Mr Laws Senior. Mr Doherty SC, who appears with Mr Morgan for Mr Laws Senior, made clear that he was unaware of the document before Mr Campbell SC sought to tender it and was unaware of its disclosure in the circumstances outlined. Mr Doherty SC, on behalf of Mr Laws Senior, objected immediately to the tender of the document. I use the word “immediately” as meaning “at the earliest opportunity after being made aware of the circumstances”.

22. As I indicated in the judgment of 2 May 2006 in this matter, the issue of the admissibility of the document is to be determined by application of the Evidence Act. Disclosure of the kind that permits the adducing in evidence of otherwise privileged communication must fulfil the criteria, relevantly, in s.122. There is no consent by Mr Laws Senior, or, if it were relevant, by Mr John Laws. (It may be relevant if the communication was on behalf of Mr John Laws: see para 5, infra.)

23. Disclosure that occurs by mistake occurs neither knowingly nor voluntarily and will not, for the purpose of s.122(2), waive privilege. Similarly, such disclosure is not “with express or implied consent” for the purpose of s.122(4) of the Act: see Ampolex Ltd v Perpetual Trustee Co (Canberra) (1996) 40 NSWLR 12 at 22.B; DPP v Kane, 11386/97 10.9.97, unreported, Hunt J, at 12 of 19; BT Australasia Pty Ltd v State of NSW [1998] FCA 295 at 10 of 12. Mr Campbell SC was correct not to rely on the original communication and, on the above reasoning, on the communication from Lamrocks to Moray & Agnew.

24. The “circulation at the Bar Table or in Court” was conduct of the first defendant which had no privilege in the document and could not be disclosure by, or express or implied consent of, the relevant client or party for the purpose of either s.122(2)or s.122(4) of the Act.

25. For those reasons I find that the document is privileged. There has been no consent to the adducing of the document in evidence, and I reject the tender.

oOo

25/05/2006	-	typographical error - Paragraph(s) date
25/05/2006	-	typographical error - Paragraph(s) [24]
25/05/2006	-	gramatical error - Paragraph(s) cvrpg