Martin and Martin and Anor (No. 3)

The Family Court of Australia considered an application by X Firm for the release and inspection of files held by M Firm, the legal practitioners consulted by the wife. The dispute centred on whether legal professional privilege attached to these communications, with X Firm arguing that privilege did not apply and the wife asserting its existence and denying any waiver. The court was asked to determine if the wife's conduct was inconsistent with maintaining privilege, and if there was a prima facie case that the communications were made for an improper purpose.

The court was required to determine two primary legal issues. Firstly, whether the wife's conduct had implicitly waived legal professional privilege by being inconsistent with the maintenance of confidentiality. Secondly, whether there was a prima facie case that the communications between the wife and M Firm were made for the purpose of furthering a crime, fraud, or other illegal or improper purpose, which would negate the privilege. The court noted that while the Evidence Act 1995 (Cth) was relevant to the general principles of privilege, the common law position applied to this specific application due to its stage and nature.

In its reasoning, the court found that the wife's conduct had not been inconsistent with the maintenance of privilege, thus rejecting the argument for implied waiver. However, the court was satisfied that a prima facie case had been established that the communications were made for an improper purpose. This conclusion was based on a series of alleged events and circumstances, including the wife's alleged collusion with the husband to avoid paying legal fees, the purchase of property by a company directed by the husband's father, the incorporation of that company by M Firm, and the subsequent establishment of a trust where the wife was an appointor and the husband and wife were beneficiaries. These facts, largely uncontradicted by the husband and wife, suggested a pattern of conduct aimed at frustrating the payment of legal fees, which the court considered fell within the exceptions to legal professional privilege at common law.

Consequently, the court ordered that the file of M Firm be released for inspection and copying by all parties, and dismissed the objections to such release by the husband and the wife.