Minter Ellison Baker O'Loughlin v Mckay & Ors (No 6) No. DCCIV-96-1083 Judgment No. D3855

[1998] SADC 3855

MINTER ELLISON BAKER O’LOUGHLIN v MCKAY & ORS (No 6)

[1998]SADC 3855

Civil
Judge Wilson

1. The applicants, Pegasus Leasing Limited and Mr David Leo Jenkin, to whom a subpoena was addressed by the plaintiff in these proceedings, sought to resist an order for the inspection of two affidavits that were referred to in other court proceedings upon the ground of legal professional privilege.  The applicants, whilst not seeking to have the subpoena set aside, objected to the said inspection.

2. On 30th June 1998 I intimated that I considered that the legal professional privilege attaching to the two affidavits had been waived, and I said that I would publish my reasons later.  I now indicate what those reasons are.

3. Mr Durrant, counsel for the applicants, based his argument upon the grounds that Mr Jenkin, in his capacity as a solicitor with Kelly and Co., had been acting on behalf of Pegasus Leasing Limited in certain Federal Court proceedings in actions No. SG 40 of 1992 and No. SG 43 of 1994 before von Doussa J in October 1994; that the subpoena requires the production (and, by implication, the inspection) of documents, namely two affidavits, one sworn by Howard Bruce Washington and the other sworn by Noel Crichton (and both “on the Court file”); and that the said affidavits were referred to by Mr B. Lander Q.C., as he then was and who was then appearing as counsel for Pegasus Leasing Limited, in the Federal Court proceedings where he stated (at page 526 of the transcript) inter alia:

   “... We could be using those documents, some admissions in the defence and (two) other affidavit(s), which (are) relevant that address perhaps a defence that was raised against as in relation to a penalty.  We say we did not have to do that but, if your Honour had pushed us to, we had (two) affidavit(s) ready in relation to the matter of penalty ...”

   [The reference to “one affidavit” in the actual transcript should be taken as a reference to “two affidavits”, something that was not disputed by Mr Smith, counsel for the plaintiff].

1. There was no dispute that, any question of waiver aside, these two affidavits were prima facie protected by legal professional privilege.  The real issue was whether the legal professional privilege which thereby attaches was waived when the affidavits, having been sworn and filed, were referred to by Mr Lander Q.C.  Mr Smith described Mr Lander Q.C. as being “in the throws of proffering” the two affidavits.

2. The relevant principles as to waiver and the authorities are set out and discussed in Attorney-General (Northern Territory) v Maurice & Ors (1986) 161 CLR 475; Argyle Brewery Pty Ltd v Darling Harbourside (Sydney) Pty Ltd (1993) 120 ALR 537; Goldberg v Ng (1995) 185 CLR 83; and, most recently, in R v Reci (1997) 70 SASR 78 and Southern Equities v Arthur Andersen (1997) 70 SASR 166.

3. Importantly, in Attorney-General for the Northern Territory v Maurice & Ors supra Gibbs C.J. said (at p. 481):

   “The principle applicable in these circumstances seems to me to be well stated in Wigmore, op.cit., par. 2327:

   “In deciding it, regard must be had to the double elements that are predicated in every waiver, i.e. not only the element of implied intention, but also the element of fairness and consistency.  A privileged person would seldom be found to waive, if his intention not to abandon could alone control the situation.  There is always also the objective consideration that when his conduct touches a certain point of disclosure, fairness requires that his privilege shall cease whether he intended that result or not.  He cannot be allowed, after disclosing as much as he pleases, to withhold the remainder.  He may elect to withhold or to disclose, but after a certain point his election must remain final.”

   The decisions in which this question has been considered seem to me to be particular applications of the rule that in a case where there is no intentional waiver the question whether a waiver should be implied depends on whether it would be unfair or misleading to allow a party to refer to or use material and yet assert that that material, or material associated with it, is privileged from production.”
   (The emphasis is mine.)

Mason and Brennan JJ (as they then were) said (at p. 487):

“The limiting effect of legal professional privilege on the availability of evidence otherwise relevant is confined, inter alia, by the doctrine of waiver.  A litigant can of course waive his privilege directly through intentionally disclosing protected material.  He can also lose that protection through a waiver by implication.  An implied waiver occurs when, by reason of some conduct on the privilege holder’s part, it becomes unfair to maintain the privilege.”
(The emphasis is mine.)

Deane J. said (at p 492-493):

“Waiver of legal professional privilege by imputation or implication of law is based on notions of fairness.  It occurs in circumstances where a person has used privileged material in such a way that it would be unfair for him to assert that legal professional privilege rendered him immune from procedures pursuant to which he would otherwise be compellable to produce or allow access to the material which he has elected to use to his own advantage.  Thus, ordinary notions of fairness require that an assertion of the effect of privileged material or disclosure of part of its contents in the course of proceedings before a court  or quasi-judicial tribunal be treated as a waiver of any right to resist scrutiny of the propriety of the use he has made of the material by reliance upon legal professional privilege.”
(The emphasis is mine.)

1. The relevant principles were stated by Deane, Dawson and Gaudron JJ in Goldberg v Ng supra as follows (at pp 95 -96):

“The circumstances in which a waiver of legal professional privilege will be imputed by operation of law cannot be precisely defined in advance.  The most that can be done is to identify a number of general propositions. Necessarily, the basis of such an imputed waiver will be some act or omission of the persons entitled to the benefit of the privilege.  Ordinarily, that act or omission will involve or relate to a limited actual or purported disclosure of the contents of the privileged material.  When some such act or omission of the person entitled to the benefit of the privilege gives rise to a question of imputed waiver, the governing consideration is whether ‘fairness requires that his privilege shall cease whether he intended that result or not’ (Wigmore on Evidence (1961), Vol 8, par 2327), quoted with approval by Gibbs CJ and by Mason and Brennan JJ in Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 481, 488. That does not mean, however, that an imputed waiver must completely destroy the privilege. Like an express waiver, it can be limited so that it applies only in relation to particular persons, materials or purposes.”
(The emphasis is mine.)

1. I applied those principles in the present case.  The conduct of Pegasus Leasing Limited, when the affidavits were sworn and filed and then referred to by its counsel, Mr Lander Q.C., “touched”, in my judgment, that “certain point of disclosure” so that “fairness require(d) that (the) privilege shall cease”.  Pegasus Leasing Limited could not, in my view, be allowed, after disclosing as much as it pleased, to withhold the remainder.

2. It would have been unfair, in my judgment, to have allowed Pegasus Leasing Limited in the Federal Court proceedings to have referred to affidavits (duly sworn and filed) and yet to have successfully asserted in these proceedings that that material was privileged from production.

3. Implied waiver here occurred when, by reason of some conduct on the privilege-holder’s part (i.e. the reference by Mr Lander Q.C. to the two affidavits being “ready”), it would have been unfair to maintain the privilege.

4. In my opinion, Pegasus Leasing Limited, through its counsel, used privileged material in such a way that it would have been unfair for it to have successfully asserted that legal professional privilege rendered it immune from procedures pursuant to which it could otherwise be compellable to produce and allow access to the material which it had elected to use to its own advantage in the Federal Court proceedings.  Ordinary notions of fairness required that an assertion as was made by Mr Lander Q.C. (being an assertion as to the effect of two affidavits, which were prima facie privileged in the course of the Federal Court proceedings) be treated as a waiver of any right to resist scrutiny of the material by reliance upon legal professional privilege.

5. In the 1981 decision of the Superior Court of New Jersey, Sicpa North America Inc v Donaldson Enterprises Inc (1981) N.J. Super. 56, 430 A 2d 262, considered by Beaumont J. in the Argyle Brewery case supra, Martin J.S.C. put the principle succinctly when he stated (at p 265):

   “(Implied waiver occurs) where the client discloses, or consents to counsel’s disclosure, of some of the privileged information where the purpose of such disclosure is to advance the client’s own self-serving objectives.   ... Once a party begins to disclose a confidential communication for a purpose outside the scope of the privilege, the privilege is lost. ...”

1. Applying that principle to the present case, Pegasus Leasing Limited consented to the disclosure by its counsel (who clearly had ostensible authority to waive privilege) of the otherwise privileged information contained in the two affidavits (which were sworn and filed and, subsequently, referred to by Mr Lander Q.C. in the relevant dialogue with von Doussa J.); the purpose of such disclosure was plainly to advance the self-serving objectives of Mr Lander’s client (for why else would Mr Lander have stated what he did?); Pegasus Leasing Limited having begun to disclose otherwise privileged material for a purpose outside the scope of the privilege, the privilege was lost by virtue of the notion of implied waiver.

2. The principles that were articulated by Deane, Dawson and Gaudron J.J. in Goldberg v Ng supra (at pp 95-96) also have application here.  They were applied very recently in R v Reci supra per Doyle C.J. at p 103 and Southern Equities v Arthur Andersen supra per Doyle C.J. at p 175 and per Bleby J. at pp 189-193.  There was an act (of counsel for Pegasus Leasing Limited) involving or related to a limited actual or purported disclosure of the contents of privileged material in the form of the two affidavits.  Such an act giving rise to a question of imputed waiver, the governing consideration was whether fairness required, as I think it did, that its privilege should be considered to have ceased whether it  intended that result or not.

3. I therefore concluded that it would have been unfair to have permitted Mr Durrant to rely upon legal professional privilege.  The disclosure by Mr Lander Q.C. had been voluntary; the reference to the affidavits was made to assist Pegasus Leasing Limited in one aspect of a civil dispute with the defendants in the present proceedings.

4. Accordingly, and for all these reasons, I granted leave to the plaintiff (as well as to the defendants) to inspect the affidavits.