Morris & Morris (No 3)
[2023] FedCFamC1F 927
•30 October 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Morris & Morris (No 3) [2023] FedCFamC1F 927
File number(s): SYC 4955 of 2021 Judgment of: SCHONELL J Date of judgment: 30 October 2023 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Notice of objection – Legal professional privilege – Where the wife issued a subpoena to a firm of accountants in New Zealand – Where the husband filed a Notice of Objection to the subpoena on the basis of legal professional privilege Where the Court is satisfied that the documents the subject of the subpoena are covered by both advice and litigation privilege – Where the wife contended that there had been a waiver – Where the Court is satisfied that the husband has waived privilege to the documents the subject of the subpoena – Where the husband objected on the basis of relevance in relation to the production of tax invoices – Where the Court is satisfied that the tax invoices could have relevance – Notice of Objection set aside. Legislation: Family Law Act 1975 (Cth) Div 2, Pt XIA, s 106B
Income Tax Act 2007 (NZ)
Cases cited: Adanguidi v The King [2023] NSWCCA 91
Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1996) 40 NSWLR 12
Attorney-General (NT) v Maurice (1986) 10 FCR 134
AWB Ltd v Cole (No. 5) (2006) 155 FCR 30; [2006] FCA 1234
Commissioner of Taxation v Rio Tinto Ltd (2006) 151 FCR 341; [2006] FCAFC 86
Commonwealth of Australia v Teemwood Holdings Pty Ltd & Ors [2002] WASC 107
Daniels Corporation International Pty Ltd v ACCC (2002) 213 CLR 543; [2002] HCA 49
Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303; [2013] HCA 46
Fort Dodge Australia Pty Ltd v Nature Vet Pty Ltd [2002] FCA 501
Hancock v Rinehart (Privilege) [2016] NSWSC 12
Hastie Group (In Liq) v Moore (T/as Deloitte Touche Tohmatsu) (2016) 339 ALR 635; [2016] NSWCA 305
Mann v Carnell (1999) 201 CLR 1; [1999] HCA 66
Telstra Corporation Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152
Viterra Malt Pty Ltd v Cargill Australia Ltd (2018) 58 VR 333; [2018] VSCA 118
Division: Division 1 First Instance Number of paragraphs: 52 Date of hearing: 26 and 30 October 2023 Place: Sydney Counsel for the Applicant: Mr Richardson SC with Mr Hollo (on 26 October 2023) and with Mr Roberts (on 30 October 2023) Solicitor for the Applicant: Barkus Doolan Winning Counsel for the Respondents: Mr Smallbone Solicitor for the Respondents: Prime Lawyers ORDERS
SYC 4955 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS MORRIS
Applicant
AND: MR MORRIS
First Respondent
D2 LIMITED
Second Respondent
F LIMITED ATF THE D TRUST (and another named in the Schedule)
Third Respondent
ORDER MADE BY:
SCHONELL J
DATE OF ORDER:
30 OCTOBER 2023
THE COURT ORDERS THAT:
1.The Notice of Objection filed 19 October 2023 is set aside.
2.The husband’s oral application for an objection on the grounds of relevance is dismissed.
3.Leave is granted to the parties to inspect the documents produced under subpoena by Y Accountants but the operation of that order is stayed until 4.30 pm tomorrow 31 October 2023 upon the condition that the husband file a Notice of Appeal by no later than 6.00 pm today.
4.Costs of all parties are reserved.
5.The husband is directed to file his material in support of any stay application by midday tomorrow 31 October 2023.
6.The husband’s foreshadowed stay application is listed for hearing at 4.30 pm tomorrow 31 October 2023 via Microsoft Teams.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Morris & Morris has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
SCHONELL J:
The husband, the wife and a number of corporate entities are parties to contested financial proceedings that are listed for hearing today before another judge of Division 1 of the Court. According to the written submissions of the wife, one of the issues in those proceedings is the circumstances, reasons why and for what purpose the husband caused the transfer of shares in a publicly listed company from his name to another company as trustee for a trust. The transfer occurred on a date after the commencement of these proceedings and the transaction is the subject of an application pursuant to s 106B of the Family Law Act 1975 (Cth) (“the Act”).
On 4 October 2023, the wife caused a subpoena to issue to Y Accountants, a firm of accountants in New Zealand, calling for the following documents:
1. a copy of this subpoena; and
2. in respect of the transfer or proposed transfer of shares in [B Limited] by [Mr Morris] (personally) to [D2 Limited] (“the transaction”), the originals and or copies of:
a. any engagement letter between you, and [Mr Morris] and or [D2 Limited] and or [F Limited] as trustee for the [D Trust] and or [E Limited] as trustee for [the D Trust], in respect of the transaction;
b. any letter, document, memorandum, email or fax (whether in hard copy or electronic form) providing instructions in respect of the transaction;
c. where instructions were provided orally, any notes (whether in hard copy or electronic form) recording instructions in respect of the transaction;
d. any letter, document, memorandum, email or fax (whether in hard copy or electronic form) providing advice in respect of the transaction;
e. where advices were provided orally, any notes (whether in hard copy of electronic form) recording the advices in respect of the transaction;
f. any brief to any lawyer including to any counsel in respect of the transaction;
g. any advices from any lawyer including to any counsel in respect of the transaction;
h. any tax invoices rendered by you and or any lawyer and or counsel in respect of any advice in relation to the transaction.
On 19 October 2023, the husband filed a Notice of Objection claiming legal professional privilege in respect of the documents. Pursuant to directions made by the trial judge on 20 October 2023, the Notice of Objection was listed for hearing before me on 26 October 2023.
At the hearing, the wife asserted that there had been a waiver of the privilege. Counsel for the husband asserted that he was not in a position to meet that claim. The wife put in issue the assertion, suggesting that notice of the claim had been given much earlier. As I could not resolve the dispute and accepting what the husband’s counsel submitted, the matter was adjourned to this morning to enable the husband to file further evidence and make further submissions.
As a consequence of the submissions made by the parties, the following issues require determination:
(1)Whether the documents the subject of the subpoena are covered by the doctrine of legal professional privilege;
(2)Whether an issue of waiver arises;
(3)Whether the evidence and submissions relied upon in the present application are, according to written submissions of the husband, “confidential and not [to] be published to any person other than the parties, their legal representatives and the court staff involved in the conduct of the present application” (at paragraph 2).
It is not in issue that the party asserting privilege carries the onus of proof, nor is it an issue that the party contending waiver carries the onus of proof.
The husband relied upon the following documents:
(1)Notice of Objection to Subpoena filed 19 October 2023;
(2)Affidavit of Mr CC filed 24 October 2023;
(3)Affidavit of husband filed 23 March 2023 – (paragraphs 192–201 and 294–332);
(4)Affidavit of Mr HH filed 26 October 2023;
(5)Trust Deed for the D Trust dated 17 March 1999;
(6)Written submissions filed 25 October 2023;
(7)Supplementary Written Submissions filed 30 October 2023.
The wife relied upon the following documents:
(1)Affidavit of wife filed 24 October 2023;
(2)Affidavit of husband filed 29 January 2022;
(3)Points of Claim dated 6 June 2023;
(4)Points of Defence dated 3 July 2023; and
(5)Written submissions filed 25 October 2023.
BACKGROUND
The husband was born in 1953 and is currently 70 years of age.
The wife was born in 1957 and is currently 67 years of age.
The parties commenced cohabitation in 1997, married in 1999 and separated in or around 2021.
On 7 July 2021, the wife commenced proceedings in the Family Court of Australia (as it then was).
In late 2021, the husband transferred 48 million shares held by him personally in the company B Limited (a company listed on the Australian Securities Exchange) to D2 Limited (being the second respondent).
The husband in his affidavit filed 29 January 2022 said:
17. I presently control 58 million [B Limited] shares with a book value of some $736.6 million at today’s list price of [over $12] per share. [In late] 2021 I transferred 48 million of shares held in my personal name to a company I control ‘[D2 Limited]’, which is a company incorporated in New Zealand. My solicitors notified my wife’s solicitors of the transfer of shares. The transfer was made for accounting and estate planning purposes.
On 4 October 2023, the wife caused a subpoena to be issued to the accounting firm Y Accountants seeking the production of documents relating to the transfer.
On 19 October 2023, the husband filed a Notice of Objection on the basis that the documents produced are the subject of legal professional privilege.
In the course of submissions, the husband’s counsel conceded that the husband retained control over the trust and that the trust was his alter ego.
ARE THE DOCUMENTS THE SUBJECT OF THE SUBPOENA COVERED BY THE DOCTRINE OF LEGAL PROFESSIONAL PRIVILEGE
The husband contended that the documents called for in the subpoena are subject to a claim for legal professional privilege in that they were brought into existence for the purposes of obtaining legal advice and/or are covered by litigation privilege.
The husband relied upon an affidavit prepared by Mr CC, who described himself as a tax partner of Y Accountants, New Zealand where he has worked for 24 years. Mr CC is a chartered accountant and says that he is qualified in the legal profession.
Mr CC gave evidence that he has acted for Mr Morris for many years. In his affidavit, he identified that at the time of preparing advice on 12 October 2021, he was of the view that the husband was “a prime candidate to be the subject of an investigation by Inland Revenue” (affidavit of Mr CC, paragraph 28). He gave evidence that at some point in 2021, he spoke to the husband about providing advice to set up a structure to hold his shares in the company B Limited. He said that he provided written advice as to the legal consequences of any transfer of capital from his personal name into a new corporate or trust structure, with particular focus on the anti-avoidance provisions of the Income Tax Act 2007 (NZ) (“the Income Tax Act”). He said that in preparing that advice, he considered and dealt with provisions of the Income Tax Act and case law (affidavit of Mr CC, paragraphs 36 and 37). In particular, he said:
38. I considered this legislation and authorities having formed the view that there was a strong likelihood that a transfer of shares to a New Zealand entity would be investigated by Inland Revenue, and furthermore, given the deemed value involved (in the order of hundreds of millions), it was my view at that time that any dispute with Inland Revenue arising out of the proposed transfer would likely end in litigation between [Mr Morris] and Inland Revenue.
He contended that the purpose in preparing the advice was to advise the husband on the applicable legal effect and consequence of tax legislation, and to have a record of that advice for the purposes of obtaining a second opinion. He said that following the giving of the advice, he advised the husband to obtain a second advice from another lawyer and, as a consequence, Mr DD was instructed to prepare an advice, which he did on 7 December 2021.
Counsel for the husband submitted that it is clear that the documents the subject of the claim for privilege are covered by both advice privilege and litigation privilege and were brought into existence for the dominant purpose of obtaining and providing legal advice. Counsel for the husband submitted that the evidence of Mr CC comfortably complies with the observations of Brereton J in Hancock v Rinehart (Privilege) [2016] NSWSC 12, wherein his Honour said as follows:
7. To sustain a claim of privilege, the claimant must not merely assert it; but must prove the facts that establish that it is properly made. Thus a mere sworn assertion that the documents are privileged does not suffice, because it is an inadmissible assertion of law; the claimant must set out the facts from which the court can see that the assertion is rightly made, or in other words “expose … facts from which the [court] would have been able to make an informed decision as to whether the claim was supportable”. The evidence must reveal the relevant characteristics of each document in respect of which privilege is claimed, and must do so by admissible direct evidence, not hearsay.
(Footnotes omitted)
The wife submitted that the bare assertions in the affidavit of Mr CC are insufficient to establish a claim for litigation privilege. In relation to the claim for advice privilege, the wife said that Mr CC does not hold a practising certificate in New Zealand and that there is an internal inconsistency in his evidence, where on the one hand he describes himself as a tax partner providing advice on tax related matters and, on the other hand, asserts that his advice is in the nature of legal advice. She submitted that there is a question of whether he is even permitted to give legal advice without a practising certificate.
The wife also submitted that the advice was not prepared for the dominant purpose of providing legal advice to the husband, that Mr CC’s evidence would tend to suggest that such advice, if given, had two purposes of equal weight, neither of which is dominant. Finally, she said that there is no evidence from Mr DD who has provided the other advice and that the tax invoices could not be privileged.
In anticipation of the submission as to Mr CC’s capacity to provide legal advice, the husband in his written submissions said as follows:
11. Under the law of Australia it is sufficient that he was admitted as a [legal professional], as he was: Commonwealth & Air Marshal McCormack v Vance [2005] ACTCA 35; Candacal Pty Ltd v. Industry Research & Development Board [2005] FCA 649; Aquila Coal Pty Ltd v. Bowen Central Coal Pty Ltd [2013] QSC 82; McKinnon and Secretary, Dept. of Foreign Affairs and Trade [2004] AATA 1365; Australian Hospital Care (Pindara) Pty Ltd v. Duggan [1999] VSC 131. According to the case law, in cases of doubt the real question will be the independence of the practitioner (usually only of concern in respect of in-house lawyers). In this case there is no doubt of [Mr CC’s] independence. He was a partner of a well-established firm external to and independent of the client.
…
13. In Kennedy v. Wallace (2004) 142 FCR 185 at [202] Allsop J (with whom Black CJ and Emmett J agreed at [62]) said, “A refusal to recognise foreign lawyers’ advice privilege or narrowly to constrict advice privilege … would undermine the rationale of the privilege. It would also undermine the administration of justice by enlivening a threat in this jurisdiction to the confidentiality of communications which would otherwise be protected in other places.”
14. In Stewart v ACCC (2012) 206 FCR 347 (FC) Besanko J observed at [53] that the Australian law of legal professional privilege “incorporates within it a foreign element as cases such as Kennedy v Wallace make clear.”
Discussion
It is beyond doubt that legal professional privilege is a matter of substantive law.
In Daniels Corporation International Pty Ltd v ACCC (2002) 213 CLR 543, the High Court held as follows:
9. It is now settled that legal professional privilege is a rule of substantive law which may be availed of by a person to resist the giving of information or the production of documents which would reveal communications between a client and his or her lawyer made for the dominant purpose of giving or obtaining legal advice or the provision of legal services, including representation in legal proceedings. It may here be noted that the “dominant purpose”' test for legal professional privilege was recently adopted by this Court in Esso Australia Resources Ltd v Federal Commissioner of Taxation in place of the “sole purpose” test which had been applied following the decision in Grant v Downs.
10.Being a rule of substantive law and not merely a rule of evidence, legal professional privilege is not confined to the processes of discovery and inspection and the giving of evidence in judicial proceedings. Rather and in the absence of provision to the contrary, legal professional privilege may be availed of to resist the giving of information or the production of documents in accordance with investigatory procedures of the kind for which s 155 of the Act provides. Thus, for example, it was held in Baker v Campbell, that documents to which legal professional privilege attaches could not be seized pursuant to a search warrant issued under s 10 of the Crimes Act 1914 (Cth).
11.Legal professional privilege is not merely a rule of substantive law.It is an important common law right or, perhaps, more accurately, an important common law immunity. It is now well settled that statutory provisions are not to be construed as abrogating important common law rights, privileges and immunities in the absence of clear words or a necessary implication to that effect. That rule, the expression of which in this Court can be traced to Potter v Minahan, was the foundation for the decision in Baker v Campbell. It is a rule which, subject to one possible exception, has been strictly applied by this Court since the decision in Re Bolton; Ex parte Beane. Cases in which it has since been applied include Bropho v Western Australia, Coco v The Queen and Commissioner of Australian Federal Police v Propend Finance Pty Ltd. The possible exception to the strict application of that rule was the decision in Yuill.
(Footnotes omitted)
In AWB Ltd v Cole (No. 5) (2006) 155 FCR 30, Young J observed as follows:
44. …
(7)The concept of legal advice is fairly wide. It extends to professional advice as to what a party should prudently or sensibly do in the relevant legal context; but it does not extend to advice that is purely commercial or of a public relations character:
(Citations omitted)
While in Attorney-General (NT) v Maurice (1986) 10 FCR 134, Woodward J observed that “legal professional privilege attaches to communications for purposes of litigation or advice passing from a client to his solicitor through an intermediary who is the agent of one or other of them” (at 140).
No application was made to cross-examine Mr CC. I accept his evidence.
I am satisfied on the basis of the submissions made by the husband’s counsel and the authorities relied on that Mr CC is competent and qualified to give legal advice.
I am satisfied that Mr CC through admissible evidence has established the facts that would enable the Court to make an informed decision that the claim of privilege is supportable. He gives evidence that he advised as to the legal consequences of any transfer of capital from the husband’s personal name into a new corporate or trust structure, that a focus of his advice was upon the anti-avoidance provisions of the New Zealand tax legislation and that it was highly likely that the transfer would be investigated by the New Zealand tax authorities with the possibility of litigation.
I am satisfied, accepting Mr CC’s evidence, that the dominant purpose of the communications between Mr CC and the husband was for the purposes of giving legal advice and that at the time the advice was given, it contemplated that there was the possibility of litigation. As much is obvious from the paragraphs of his affidavit I have referred to earlier and the summary of his evidence I have addressed above. I am also satisfied for the same reasons that the advice prepared by Mr DD falls into the same category.
I am not satisfied that there is any ambiguity as asserted by the wife’s senior counsel. The dominant purpose is made clear by the terms of Mr CC’s affidavit. As much is conceded by the wife’s written submissions that contended “[Mr CC’s] evidence puts beyond doubt that the husband relied on advice from [Mr CC] and [Mr DD] prior to taking that step” (at paragraph 8). That step being the transfer of the shares.
I am comfortably satisfied that the documents the subject of the subpoena are covered by both advice and litigation privilege.
HAS THERE BEEN A WAIVER
The wife contended that an issue of waiver arises. In that respect, her senior counsel submitted that one of the issues in the proceedings is the reasons for the husband’s transfer of shares and relies for the waiver upon the assertion in the husband’s affidavit that “the transfer was made for accounting and estate planning purposes” (husband’s affidavit filed 29 January 2022, paragraph 17). It is clear from the evidence of Mr CC that the husband sought the advice from him and Mr DD prior to the transfer.
The wife submitted that husband has put in issue his state of mind and that, in circumstances where legal advice is likely to have been relevant to the formation of that state of mind, the husband has consequently waived his privilege (see Telstra Corporation Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152 (“Telstra Corporation Ltd v BT Australasia Pty Ltd”)).
The husband’s counsel stated there has been no waiver. He submitted that the subject paragraph in the affidavit filed 29 January 2022 was in response to an interlocutory controversy about disclosure and that the legal significance of the paragraph is that it makes no express reference to legal advice. He submits accordingly that no state of mind issue arises.
In support, he relied upon a number of authorities including Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1996) 40 NSWLR 12 and the New South Wales Court of Appeal’s decision in Hastie Group (In Liq) v Moore (T/as Deloitte Touche Tohmatsu) (2016) 339 ALR 635 (“Hastie”). In Hastie, their Honours observed:
57. In our opinion, this submission is not consonant with the authorities to which we have referred above which make it plain that neither relevance to the other party’s claim nor reference by that party to a privileged document, without more, gives rise to waiver. Ordinarily there will need to be reliance on the contents of such a document. That has not occurred in the present case.
As well as relying upon the Victorian Court of Appeal’s decision in Viterra Malt Pty Ltd v Cargill Australia Ltd (2018) 58 VR 333, where the Court held:
73. Notwithstanding the need for caution on that account, it can be said that a pleading of reliance, without more, will not usually manifest inconsistency with the maintenance of client legal privilege in communications relevant to that state of mind. It can also be seen that the observation of Allsop J in DSE as to the circumstances in which privilege will be waived, while still a gloss on the statutory language, has commanded wide acceptance as a statement of the general operation of the principle.
…
78.… This is not a case where the nature of the pleading makes it inconsistent to withhold privileged communications about the transaction, notwithstanding that those communications might reveal something of Cargill’s state of mind. It is entirely to be expected that a party pleading a misleading or deceptive conduct case arising from a commercial transaction will have received legal advice regarding the transaction before its consummation. The applicants’ argument would suggest that privilege is waived by pleading such a case. The authorities show that something more is required.
Discussion
In Mann v Carnell (1999) 201 CLR 1 (“Mann v Carnell”), the High Court said:
28.… Legal professional privilege exists to protect the confidentiality of communications between lawyer and client. It is the client who is entitled to the benefit of such confidentiality, and who may relinquish that entitlement. It is inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege. …
29.Waiver may be express or implied. … What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large.
(Footnote omitted)
In Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303, the High Court stated as follows:
30.According to its strict legal connotation, waiver is an intentional act done with knowledge whereby a person abandons a right (or privilege) by acting in a manner inconsistent with that right (or privilege). It may be express or implied. In most cases concerning waiver, the area of dispute is whether it is to be implied. In some cases waiver will be imputed by the law with the consequence that a privilege is lost, even though that consequence was not intended by the party losing the privilege. The courts will impute an intention where the actions of a party are plainly inconsistent with the maintenance of the confidentiality which the privilege is intended to protect.
31.In Craine v Colonial Mutual Fire Insurance Co Ltd, it was explained that “‘[w]aiver’ is a doctrine of some arbitrariness introduced by the law to prevent a man in certain circumstances from taking up two inconsistent positions … It is a conclusion of law when the necessary facts are established. It looks, however, chiefly to the conduct and position of the person who is said to have waived, in order to see whether he has ‘approbated’ so as to prevent him from ‘reprobating’”. In Mann v Carnell, it was said that it is considerations of fairness which inform the court’s view about an inconsistency which may be seen between the conduct of a party and the maintenance of confidentiality, though “not some overriding principle of fairness operating at large”.
32.Those considerations, articulated in relation to waiver at common law, apply with equal force in relation to the statutory question posed by s 122(2) of the Evidence Act, and made applicable by s 131A of that Act to the determination of a question of waiver of client legal privilege arising in the context of pre-trial discovery. That question is whether the client or party concerned “has acted in a way that is inconsistent with the client or party objecting to” the production of a document.
While in Telstra Corporation Ltd v BT Australasia Pty Ltd, the Full Court observed at 166–167:
Where, as in this case, a party pleads that he or she undertook certain action “in reliance on” a particular representation made by another, he or she opens up as an element of his or her cause of action, the issue of his or her state of mind at the time that he or she undertook such action. The court will be required to determine what was the factor, or what were factors, which influenced the mind of the party so as to induce him or her to act in that way. That is, the party puts in issue in the proceeding a matter which can not fairly be assessed without examination of relevant legal advice, if any, received by that party. In such circumstances, the party, by putting in contest the issue of his or her reliance, is to be taken as having consented to the use of relevant privileged material, or to put it another way, to have waived reliance on the privilege which such material would otherwise attract.
The determination as to whether or not there is an implied waiver is fact specific.
The transfer of shares and why it occurred is an issue in the proceedings. It is clear that legal advice was obtained at the time of the transfer. The husband by the statement in his affidavit has put in issue his state of mind as to the reasons for the transfer. It is clear from the evidence of Mr CC that legal advice was relevant or likely relevant to that state of mind.
Having deployed “accounting and estate planning” as the purpose of the transfer and thereby raising the issue of state of mind to which the legal advice is likely to have contributed, he cannot maintain the privilege. His voluntary actions are inconsistent with the maintenance of the confidentiality which the privilege had intended to protect.
Further, the maintenance of the privilege would prevent the wife from being able to test the allegation. That is forensically unfair in the Mann v Carnell sense. As Wheeler J observed in Commonwealth of Australia v Teemwood Holdings Pty Ltd & Ors [2002] WASC 107:
9.… if, by its pleading or otherwise, a party puts its state of mind in issue and it can be shown that the legal advice in question was likely to have been relevant in the formation of that state of mind, the privilege will have been waived …
10.… On the other hand, a party may necessarily put its state of mind in issue in the proceedings by, for example, pleading reliance upon some representation or other or by seeking rectification of the contract for mistake; or a state of mind may be put in issue by some evidentiary assertion which is clearly relevant to the issues between the parties. In these latter types of case, fairness clearly requires the waiver of the privilege in relation to legal advice which may have contributed to that state of mind. …
(Citations omitted)
I do not accept the husband’s counsel’s proposition that Adanguidi v The King [2023] NSWCCA 91 (“Adanguidi”) is authority for the proposition “that defending a charge by another about one’s state of mind does not give rise to issue waiver” (husband’s written submissions, paragraph 18). That is not what Weinstein J was referring to in Adanguidi. There is ample authority for the proposition that a waiver can arise either by cause of action or defence (see Commissioner of Taxation v Rio Tinto Ltd (2006) 151 FCR 341; Fort Dodge Australia Pty Ltd v Nature Vet Pty Ltd [2002] FCA 501).
I am satisfied that the husband has waived privilege to the documents the subject of the subpoena.
The husband’s counsel sought leave to amend the Notice of Objection to abandon the claim for privilege in relation to the tax invoices and asserts in lieu a claim of relevance. I granted that leave. The wife’s senior counsel submits that where there is no claim for privilege in relation to the tax invoices, only one of relevance, matters that reveal timing and steps taken (which so it is submitted are often revealed in tax invoices) can form part of the chain of instructions given and the advice obtained. I am satisfied that the tax invoices could have apparent relevance to the issues in the proceedings, particularly in circumstances where waiver has been established.
The husband’s written submissions sought to make a claim of confidentiality. Beyond the broad outline referred to in the written submissions, I was provided with no submissions as to why the Court should make an order of the type identified other than a submission that an order of a similar type had previously been made by the trial judge. Senior counsel for the wife contended that the order made on a previous occasion was in a different context and in relation to different documents.
The circumstances in which the Court will in the exercise of its discretion make such an order are outlined in Div 2 of Pt XIA of the Act. No other submission was advanced on behalf of the husband as to why it is that I should exercise my discretion to make such an order. Just because a judge on a previous occasion made such an order does not without more provide a basis for why I should so order. In the circumstances, I decline to do so.
I will make orders dismissing the Notice of Objection.
I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Schonell. Associate:
Dated: 30 October 2023
SCHEDULE OF PARTIES
SYC 4955 of 2021 Respondents
Fourth Respondent:
E LIMITED ATF THE D TRUST
21
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