Mackay Sugar Co-operative Association Ltd v CSR Limited

[1996] FCA 165

CATCHWORDS

DISCOVERY - production of documents - legal professional privilege - whether legal advice was discoverable because privilege waived - express waiver - implied waiver - whether fairness required disclosure of a document referred to in cross examination of a witness - relevance of the advice to the issues

Ampolex v Perpetual Trustee Co Canberra Ltd (1996) 14 ACLC 977 Dist

Mackay Sugar Co-operative Association Ltd, ED & F Man Australia Pty Ltd, Mackay Refined Sugars Pty Ltd, ED & F Man New Zealand Limited and Mackay Refined Sugars (NZ) Limited v CSR Limited and New Zealand Sugar Company Limited
No QG 178 of 1994
Kiefel J Brisbane 24 October 1996

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION

No. QG 178 of 1994

BETWEEN:

MACKAY SUGAR CO-OPERATIVE ASSOCIATION LTD

First Applicant

AND:

ED & F MAN AUSTRALIA PTY LTD

Second Applicant

AND:

MACKAY REFINED SUGARS PTY LTD

Third Applicant

AND:

ED & F MAN NEW ZEALAND LIMITED

Fourth Applicant

AND:

MACKAY REFINED SUGARS (NZ) LIMITED

Fifth Applicant

AND:

CSR LIMITED

First Respondent

AND:

NEW ZEALAND SUGAR COMPANY LIMITED

Second Respondent

JUDGE MAKING ORDER:   Kiefel J
DATE OF ORDER:               24 October 1996
WHERE MADE:                   Brisbane

MINUTES OF ORDERS

THE COURT ORDERS THAT:

1. The motion filed 25 September 1996 be dismissed.

1. The applicants for discovery, CSR Limited and New Zealand Sugar Company
   Limited pay the costs of the respondents to the motion to be taxed in the event of disagreement.

Note:Settlement and Entry of Orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION

No. QG 178 of 1994

BETWEEN:

MACKAY SUGAR CO-OPERATIVE ASSOCIATION LTD

First Applicant

AND:

ED & F MAN AUSTRALIA PTY LTD

Second Applicant

AND:

MACKAY REFINED SUGARS PTY LTD

Third Applicant

AND:

ED & F MAN NEW ZEALAND LIMITED

Fourth Applicant

AND:

MACKAY REFINED SUGARS (NZ) LIMITED

Fifth Applicant

AND:

CSR LIMITED

First Respondent

AND:

NEW ZEALAND SUGAR COMPANY LIMITED

Second Respondent

CORAM:Kiefel J

DATE:24 October 1996

PLACE:Brisbane

REASONS FOR JUDGMENT

This application concerns discovery of legal advice in writing received by the applicant in these proceedings in about December 1993 at a time after the Trade Practices Commission had apparently denied authorisation for a merger, but when the
joint venture relationship between the applicants and respondents, or some of them, was still on foot.

The statements made by the Chief Executive Officer of the applicant, Mr Harley, during a hearing and under cross-examination were to the effect that, at this time, the applicant was approached by representatives of the Coca-Cola Group, one of the proposed clients of the joint venture.  The advice referred to by the witness is said to be relevant to the decision to deal with Coca-Cola Amatil.  The entry into that agreement by the applicant is said to be one of the breaches of the relationship constituted by the joint venture agreement.

Whilst the principal issue on this application was as to whether there had been a waiver, expressly or by implication, and relevance was not gone into in great detail, I think it right to say that the relevance of the advice seems to be quite peripheral to the essential issues in the proceedings.  If it were to have any use it seems to me that it would be as a tool for cross-examination relating to state of mind.  This is more relevant perhaps to credit than as to any conduct connected with any decision made.  Nevertheless, I shall turn to the question of waiver which is the basis for the application.  That part of the transcript of Mr Harley's evidence referred to is to this effect:

“The Trade Practices Commission denied authorisation to the proposed merger on 8 December.  On that day, Coca-Cola very cleverly came to us and asked us to quote for business.  We weren’t sure what was going to happen.  We contemplated an appeal to the Trade Practice Review Tribunal, but fundamentally we were still committed to the concept of trying to make the CSR joint venture work, but the decision from the Trade Practices Commission put us in a very difficult position.  If we declined to quote to Coca-Cola they would find that quite strange in the
context of the Trade Practices Commission having denied authorisation to the proposed joint venture.  We took - quick legal advice was that we should - we needed - we’d lost immunity that we’d had under the application period from price collusion and whatever else.  We therefore needed to put in an independent quote.  What happened here was that we actually knew what CSR were proposing to do because we’d had those discussions with them.  We were still committed to trying to make the joint venture work and what we did in fact was we constructed the quote in such a way as to ensure that CSR would get all of the business,  but we would have a face-saving formula with Coca-Cola by having put in our own independent quote.”

One of the difficulties in approaching the question of waiver here is that the disclosure made is not put in context of the hearing which was then occurring.  It was not clear just what it involved.  But that is just one of the difficulties in the path of the applicant.  In my view, there is no express waiver.  It cannot be inferred from the words: “We took - quick legal advice was that we should - we needed - we'd lost immunity that we'd had under the application period of price collusion and whatever else”.  The necessary knowledge or intention to waive privilege is not thereby disclosed.  That leaves the question as to whether waiver ought be implied on the basis that fairness dictates the disclosure of the document referred to.  Whilst considerable reliance was placed upon the decision in Ampolex v Perpetual Trustee Co Canberra Ltd (1996) 14 ACLC 977 at 982, I think it is distinguishable on its own facts. There is no doubt that, where the substance of an advice is put forward by a party to support other statements or a course of conduct, fairness may well dictate that the advice referred to be disclosed so that the weight it has provided to the other evidence can be tested. The other party can in such circumstances be seen to be put in a position of disadvantage. Here the reference falls very well short of that. I should interpolate here that it is not even clear to me that the substance of the advice is
disclosed.  It could be, as the solicitor for the applicant for discovery says, that the legal advice is that the applicant had lost immunity that they had had under the application period from price collusion, although, even if that is the case, it does not seem to be clear that what follows (“We therefore needed to put in an independent quote”) was part of the advice or whether it was a decision made as a result of it.  But it is not abundantly clear, in any event, that the advice was that they had lost immunity.  It could well be that he is referring to the seeking of legal advice as to that question.  Even if that be the advice given, Mr Thompson points out that that is hardly a highly controversial matter.  That seems to be so, although I do not think the application is to be resolved by reference to it.

Returning to the question as to whether there is an implied waiver, it seems to me that the witness was providing a narrative of events at about this time.  Certainly he volunteers the information, but, as I have said, not in such a way as to show that he intended that the advice be disclosed or relied upon.  The reference to it, as short as it is, is little more than a side reference to the taking of advice as part of the steps which were undertaken about that time.  I am not satisfied that any advantage was then gained by the applicant by Mr Harley referring to it, nor that any advantage could then be said to flow in relation to the ultimate hearing of the action.  And it would follow that there is no apparent disadvantage, in my view, to the applicant for discovery not having the legal advice provided.

In these circumstances, I propose to dismiss the motion for further discovery.  I will hear counsel as to costs.
       The further order will be that the respondents to the proceedings, the applicants for discovery, CSR Limited and New Zealand Sugar Company Limited, pay the costs of the respondents to the motion to be taxed in the event of disagreement.

I certify that this and the preceding four pages are a true copy of the reasons for judgment herein of the Honourable Justice Kiefel.

Associate

Date:24 October 1996

Counsel for the applicants:   Mr G A Thompson
Solicitors for the applicants:  McCullough Robertson

Solicitors for the respondents:                 Clayton Utz

Date of Hearing:  24 October 1996
Place of Hearing:  Brisbane
Place of Judgment:  Brisbane
Date of Judgment:  24 October 1996