PASCOT & PASCOT
[2010] FamCA 644
•4 June 2010
FAMILY COURT OF AUSTRALIA
| PASCOT & PASCOT | [2010] FamCA 644 |
| FAMILY LAW – PRACTICE AND PROCEDURE – discovery – legal professional privilege – file of the husband’s solicitors produced under subpoena and inspected by the wife’s legal representatives – access to the subpoenaed documents revoked later that day – whether privilege attached to the solicitor’s file – whether there was an implied waiver of privilege arising out of specific portions of the husband’s affidavit as relied upon by the wife – whether wife’s legal representatives should be restrained from continuing to act on her behalf – whether wife’s legal representatives would be subject to an order not to disseminate the contents of the documents to those who may subsequently represent the wife |
| Evidence Act 1995 (Cth) Family Law Act 1975 (Cth) Family Law Rules 2004 (Cth) |
| Alfasi & The Alfasi Group (2006) FLC 93-271 Odgers, S, Uniform Evidence Law (8th edition, 2009) Thompson Lawbook Co, NSW |
| APPLICANT: | Ms Pascot |
| RESPONDENT: | Mr Pascot |
| FILE NUMBER: | SYC | 3678 | of | 2007 |
| DATE DELIVERED: | 4 June 2010 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Justice Le Poer Trench |
| HEARING DATE: | 24 November 2009 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Lloyd SC |
| COUNSEL FOR THE RESPONDENT: | Mr Campton |
Orders
The husband make available for inspection by the wife’s legal representatives those documents contained in the file produced to the Court by the husband’s former lawyers, Meyer Pigdon, which fit the following description:
(a)All documents noting instructions from the husband prior to the advice being given as specified in paragraph 6 of the husband’s affidavit sworn 10 September 2008.
(b)All documents containing the advice, or any part thereof, to the husband, by his solicitor, to proceed to obtain agreement with the wife to enter into a financial agreement.
In the circumstances of this case, should the wife’s legal representative notify the husband’s legal representative that it is asserted that not all of the documents required to be produced for inspection pursuant to Order 1 hereof have been provided then the husband’s solicitors are to provide the file to Justice Le Poer Trench for the purpose of inspection and determination as to whether any further documents on the file need to be provided under Order 1 hereof.
I stand over for further hearing the determination of the husband’s application that the solicitor for the wife and her counsel be restrained from acting further for her and ancillary orders consequent upon an injunction of that nature being granted.
IT IS NOTED that publication of this judgment under the pseudonym Pascot and Pascot is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 3678 of 2007
| MS PASCOT |
Applicant
And
| MR PASCOT |
Respondent
REASONS FOR JUDGMENT
introduction
The principal proceedings before the court were instituted by the wife and call for orders to be made setting aside a binding financial agreement and thereafter orders to then be made under section 79 of the Family Law Act 1975 (Cth) (“the Act”). That application is opposed by the husband.
On either 30 September 2009 or 24 November 2009 the husband made an oral application seeking the following order:
Those currently advising the wife withdraw from the proceedings and thereafter be restrained from disseminating the information obtained during their engagement on behalf of the wife to any other person.
The wife opposed the order sought by the husband and effectively sought a number of orders/declarations. The application of the wife appears to have been an oral one. The orders/declarations sought, as best I understand them are as follows:
(a)The husband’s application made 24 November 2009 be dismissed.
(b)A declaration that the second order made by the Deputy Registrar on 21 November 2008, namely the revoking of the order permitting inspection of the file produced to the Court by the husband’s former solicitor pursuant to subpoena, was an order made without power and therefore a nullity.
(c)A declaration that legal professional privilege was waived by the husband upon his failure to object to the inspection of the file produced to the court by his former solicitor and/or the inspection of the subject file by the wife’s solicitor on 24 November 2008.
(d)A declaration that the husband has waived legal professional privilege in relation to at least parts of the file produced to the Court by his former solicitors consequentially upon two portions of his affidavit contained in paragraphs 6 and 10. That affidavit was sworn 10 September 2008.
The case now before the Court, involves a dispute between the parties about the inspection of documents, namely a solicitor’s file, produced to the Court under subpoena on 21 November 2008. The file was produced by a solicitor who had acted for the husband at an earlier time. A claim for legal professional privilege was intended to be made by the husband’s current solicitor in relation to the solicitor’s file, however, the claim was not made at the time the subpoena was called in a hearing before a Registrar of this Court. As a consequence, an order was made for the inspection of the documents. Inspection took place immediately by the wife’s solicitor.
Later that day, upon the application of the husband’s solicitor, an order was made revoking the order previously made for the inspection of the documents.
A number of questions arise for determination out of those circumstances, the precise details of which will be referred to further in these reasons. Those questions are as follows:
(a)Was the order made by the Registrar permitting inspection of the documents produced under subpoena a substantive order or a procedural order?
(b)Did the Registrar have power to revoke the inspection order?
(c)Did the inspection of documents on 21 November 2008, produced in answer to subpoena by the husband’s former solicitor, prior to the revocation order being made, amount to waiver of legal professional privilege?
(d)Is there an implied waiver of legal professional privilege, in relation to any of the documents produced on subpoena (the previous solicitor’s file), arising from paragraphs 6 and 10 of the affidavit of the husband sworn on 10 September 2008?
(e)In the event of the Court determining that there has been no waiver of privilege in relation to the subject documents, should an order be made injuncting the wife’s present solicitors from acting for her any further in relation to the proceedings and also injuncting the release of any information obtained by them from the inspection of the documents?
(f)In the event that waiver of legal professional privilege did occur by the events of the morning of 21 November 2008, taking into account the circumstances in which that occurred, should the Court nonetheless injunct the wife’s solicitors from further acting for her and restrict the publication of any information obtained from the inspection?
On 4 March 2010 I caused an email to be sent to each of the parties solicitors seeking clarification on whether an affidavit of the wife’s sworn 2 November 2008 and 14 January 2009 had been read in the application under consideration and/or whether there would be any objection to my taking those affidavits into consideration in determining the rather complex applications. A reply was received by my Associate from the wife’s counsel Mr Campton on 5 March 2010. A final reply was not received from the husband’s solicitor until 7 May 2010. Both parties consented to me reading the subject affidavits of the wife.
Background Facts
On 11 November 2008 a subpoena was issued at the request of the wife addressed to Max Meyer of Meyer Pigdon Solicitors. The subpoena noted the contact address for the husband as “Care of Messrs Miller Goddard Solicitors”. The subpoena called for the production of all documents in relation to the drafting of the binding financial agreement entered into between the parties and dated 28 March 2001, including but not limited to “all file notes, letters, telephone notes, memoranda and the like.”
The subpoena was returnable in the Registrar’s list at 10.30 am on 21 November 2008.
The affidavit of Peter Feather sworn 27 October 2009 sets out the circumstances and events of 21 November 2008.
Mr Feather attended the Family Court of Australia in Sydney in this matter to appear on behalf of the wife on the return of the subpoena above referred to. The subject subpoena was one of three which had been issued at the request of the wife’s solicitors. Mr Feather attended at the Court and was present at 10.30 am.
Some time after 10.30 am the subject subpoena was called. A person identifying himself as a solicitor attended on behalf of Max Meyer (Solicitor), the person to whom the subpoena had been addressed. That person produced to the Court the documents sought in the subpoena. The solicitor for Max Meyer told the Registrar “we are claiming a privilege in relation to documentation produced.” Mr Feather then said to the Court, “The husband’s solicitors have been advised by letter dated 13 November 2008 of the subpoena to Max Meyer. As they are not in Court access should be granted to the papers as the privilege, which is the husband’s privilege, is not his solicitor’s privilege.” Mr Feather tendered a copy of the letter from his firm to the husband’s solicitors in relation to the subject subpoena, such letter dated 13 November 2008. Mr Feather reports the solicitor representing Mr Meyer then said words to the effect, “I do not wish to be heard any further in relation to this matter.” The Registrar then granted all parties and their legal representatives leave to inspect the documents so produced.
Mr Feather reports that other subpoenas returnable on that day were not answered and those subpoenas were stood over to 26 November 2008 at 10.30 am.
Immediately upon obtaining leave to inspect the documents Mr Feather attended on the Ground Floor of the Sydney Registry of the Court and inspected the documents. He had a dictaphone with him and dictated observations in relation to the documents inspected. Upon completing the inspection he left the Court and returned to his office. Whilst at Court on 21 November 2008 he made some hand-written notes.
The letter dated 13 November 2008 from the wife’s solicitors to the husband’s solicitors, Messrs Miller Goddard, was annexed to the affidavit of Mr Feather. That letter is in simple terms and is as follows;
“Dear Sirs,
Re: [Pascot & Pascot]
We enclose herewith copy of subpoena issued to Max Meyer of Meyer Pigdon Solicitors which is returnable at 10.30 am on 21st November, 2008 for your information and records.
Yours faithfully,
HUMPHREYS & FEATHER.”
There is no issue that a copy of the subpoena was provided.
On 27 October 2009 Pamela Joan Humphreys, solicitor, swore her affidavit, which was read in the proceedings.
That affidavit provides the following relevant information. Following the sending of the letter dated 13 November 2008 to the husband’s solicitor, no contact was received from Miller Goddard, the solicitors acting for the husband, advising of any objection to the subpoena.
On 21 November 2008 the wife’s solicitor received a letter from Miller Goddard advising that at 12.45 pm on the day the letter was sent (21 November 2008) Registrar Micallef, as she was then known, revoked access to the material produced under subpoena by Meyer Pigdon Solicitors and directed that the matter of access to those documents be revisited when the proceedings were next before the Court for return of subpoena on 26 November 2008. The letter further stated, “During the course of our Application we advised the Court that we made no criticism of your firm’s conduct in this matter and that Mr Peter Feather had already inspected the documents.” Further the letter said, “It is our intention to seek our client’s instructions as to whether he wishes to make a claim of privilege in respect of the material; once we have those instructions we will revert to you.”
Ms Humphreys says that on 25 November 2008 she received a facsimile copy of a letter dated 21 November 2008 from Messrs Miller Goddard. On that same date she received a further letter identical in terms to the first letter but bearing the date 25 November 2008. That letter advised as follows, “Further to our letter of 21 November 2008 we confirm that we are instructed to claim legal professional privilege over the file produced in answer to the subpoena issued by you addressed to Meyer Pigdon.”
On 26 November 2008 Ms Humphreys attended at Court for the further hearing in relation to the subpoena. The parties there agreed that any argument in relation to the husband’s claim for legal professional privilege was to be adjourned for hearing before the Court on 10 December 2008. On 10 December 2008 the hearing date was vacated and the argument adjourned to 30 September 2009.
Ms Humphreys says that on 30 September 2009 the husband raised for the first time that he would be seeking an order restraining the wife’s solicitors, Humphreys & Feather, from further acting in the proceedings.
The Registrar’s “Subpoenaed Documents Action Sheet” for 21 November 2008 is tendered on behalf of the wife. That document shows that on that date the documents produced by Meyer Pigdon were released for inspection by all parties and the parties’ legal representatives. It further shows as follows, “I note that at 12.45 pm I revoked the inspection order (but this issue will be addressed again on 26 November 2008)”.
A further note appears on the Action Sheet as follows;
“I note that Meyer Pigdon produced documents in response to the subpoena to them and whilst they made a claim for legal professional privilege, they did not wish to pursue that claim as it is a matter for the husband (whose lawyer was not present in Court today).”
An affidavit by John Miller sworn 9 October 2009 is relied upon by the husband. Nothing in that affidavit takes the matter any further.
An affidavit by Dinah Goddard sworn 1 October 2009 was also relied upon by the husband. Ms Goddard says that on 7 February 2008 she received from Max Meyer of Meyer Pigdon Solicitors the husband’s file relating to the preparation, negotiation and execution of a binding financial agreement on behalf of the husband.
She further deposes that on Monday, 17 November 2008 she received a letter from the wife’s solicitors enclosing a copy of the subpoena issued to Meyer Pigdon which was marked returnable on 21 November 2008 at 10.30 am. She said, “I immediately formed the view that my client would wish to claim solicitor/client privilege in relation to the documents in the schedule to the subpoena.”
On 17 November 2008 Ms Goddard says that she received a letter from Meyer Pigdon. A copy of that letter is annexed to her affidavit. That letter is in the following terms;
“In the marriage of [Pascot]:
We assume that Humphreys & Feather have served you with a copy of a
Subpoena directed to Max Meyer of this firm to produce documents in the
above matter.We may be bound to produce those documents but please advise whether your client requires us to assert his legal professional privilege.
An urgent response would be helpful given that while the Subpoena was served on the 14th November it is returnable on the 21st November.”
Following the receipt of the letter from Meyer Pigdon, Ms Goddard telephoned Mr Meyer. They had a conversation about the documents which Mr Meyer may have to produce pursuant to the subpoena. He undertook to “get back to” Ms Goddard once he ascertained what documents would need to be produced to the Court. Ms Goddard did not hear from Mr Meyer again prior to 21 November 2008.
Ms Goddard was not in the office on 20 November 2008. She arrived at her office on 21 November 2008 at 10.25 am. She found on her chair a facsimile from Mr Meyer dated 20 November 2009 and transmitted at 3.24 pm that day. A copy of that facsimile is annexed to her affidavit. That letter advised, inter alia, that the firm “[held] a photocopy of all materials in the files previously forwarded to you…”.
Ms Goddard immediately left for Court and arrived at 10.55 am.
Ms Goddard says that at about 10.58 am she sought leave from Registrar Micallef “to re-mention the matter shortly” and informed her, “I intended to claim privilege over the material produced in response to the subpoena. That leave was granted.”
Ms Goddard waited until Registrar Micallef had completed her list and she was then permitted to re-mention that matter. At that time Registrar Micallef revoked the earlier order made granting inspection of the documents produced by Meyer Pigdon.
At 1.47 pm Ms Goddard sent by facsimile to the wife’s solicitors the letter which I have previously referred to as an annexure to the affidavit of Ms Humphreys.
On 25 November 2008 Ms Goddard advised the solicitors for the wife that instructions were now held from the husband to claim legal professional privilege in respect of the file produced to the Court by Meyer Pigdon.
The last paragraph of Ms Goddard’s affidavit refers to a matter which is uncontroversial, namely that on 29 September 2009 Mr Campton, Counsel for the wife, then unaware of the Court’s orders in relation to the file produced by Meyer Pigdon, attended at the Registry to inspect documents which had been produced on subpoena and released for inspection. Mr Campton was provided by the Court with the file from Meyer Pigdon and proceeded to inspect it. No criticism is made of Mr Campton in relation to that event, however it is the subject of submission in relation to the orders sought by the husband.
Part of the submission made on behalf of the wife is that the husband in paragraph 6 of his affidavit sworn 10 September 2008 and also in the first sentence of paragraph 10 of that affidavit impliedly waives legal professional privilege. Paragraph 6 of the affidavit is as follows, “I contacted my then solicitor, Max Meyer, who suggested we put in place a postnuptial agreement before accessing the funds in the Trust.”
The first sentence of paragraph 10 of the husband’s affidavit is as follows, “I first met with Mr Meyer in about December 2000 and gave him general instructions about what the wife and I had jointly agreed should be in the agreement.”
Is the Order made by the Registrar on 21 November 2008 revoking the earlier order made that day, granting inspection of documents produced under subpoena by Meyer Pigdon, a valid order made within power and therefore having force and effect?
The submissions made on behalf of the wife are written and are as follows:
1.The Order made by the Registrar on the 21st November 2008 pursuant to Rule 15.33 was made pursuant to a delegated power (Rule 18.06 – Table 18.5 item 29). The Registrar also had the power at that time to set aside the subpoena, or to refuse inspection of the documents produced.
2.The power exercised by the Registrar in making the determination was deliberate. The Order made was both substantial and final.
3.The exercise of power was exhausted by the Registrar upon making the order for inspection.
4.The Registrar was “functus” in relation to the inspection order upon that Order being made.
5.The learned Registrar did not have power or jurisdiction to “revoke” (or in effect, review) the earlier Order. Her power and function had been exhausted in relation to that particular matter.
6.The determination made by the Registrar has at no time been the subject of any application for review. In absence of any application for review, an application for a stay of the Order cannot be maintained.
7.There is ample jurisprudence to support the contention that upon the Court making an Order, it cannot be altered without a re-hearing or appeal (save in cases of mistakes or errors arising from accidental slips or omissions by the judicial officer that do not involve or engage a further re-exercise of discretion).
8.At the present time, the Order for inspection in favour of the wife and her legal representatives remains on foot (absent any application for leave to review out of time the exercise of power completed by the Registrar in making the inspection order and the determination of that review together with any application for a stay of the substantive order pending the hearing of the review (if the leave to extend time is granted).
The thrust of the submissions on behalf of the wife includes a statement that the order made firstly by the Registrar on 21 November 2008 providing for inspection of the Meyer Pigdon file was a “substantive” order and not a “procedural” order.
The submission made on behalf of the husband is that the order first made on 21 November 2008 by the Registrar was a “procedural” order and not a “substantive” order.
The consequence of the nature of the order, that is, whether it was “procedural” or “substantive”, is pivotal in this determination.
The husband’s Counsel points to Rule 1.11 of the Family Law Rules 2004 (“the Rules”), which is as follows:
Court may set aside or vary order
The court may set aside or vary an order made in the exercise of a power under these Rules.
Both the husband and wife’s legal representatives agree that Rule 1.11 can only be used by a Deputy Registrar in respect of an existing procedural order.
There is no issue that Ms Micallef was, on 21 November 2008, a Deputy Registrar.
Rule 18.06 is headed “Deputy Registrars”, and subsection (1) is as set out below:
(1) Each power of the court mentioned in an item of Table 18.4 is
delegated to each Deputy Registrar.
Item 9 of the abovementioned Table gives the Deputy Registrar the power to make procedural and costs orders, subject to the restrictions imposed by s37A(6) of the Act. That restriction relates to the making of cost orders and is not relevant to the determination required in this case.
Section 37(A)(1)(c) of the Act says the following, under the heading “Delegation of powers to Registrars”:
(c) the power, in proceedings under this Act, to make orders in relation to discovery, inspection and production of documents in the possession, power or custody of a party to the proceedings or of any other person
The procedures and matters of practice relating to subpoenas are contained within Chapter 15 of the Rules. In particular, within Part 15.3, Rule 15.26 specifically deals with objections to subpoenas. Under Rule 15.25(1)(b) a subpoena remains in place until the earliest of one of three listed events occurs, the second event being:
(b) the issuing party or the court releases the named person from the
obligation to comply with the subpoena
The Rules relating to an objection to inspecting or photocopying a document
are set out in Rule 15.31, and subsection (2) provides that:
(2)The person must, as soon as practicable after being served with the subpoena and at least 10 days before the court date, give written notice of the objection, or other order sought, in accordance with Part F of the Subpoena, to:
(a) the Registry Manager;
(b) the named person, if applicable;
(c) the other parties; and
(d) any independent children’s lawyer.
I note that the Full Court of the Family Court of Australia in Re M (Delegation of Powers to Deputy Registrars) (2009) FLC 93-406 recently considered the issue of the delegation of powers under the Rules to Deputy Registrars, in relation to making consent orders.
Counsel for the wife argues that the Registrar was “functus” in relation to the inspection order, and was therefore without the power or jurisdiction to revoke or review the earlier order.
It is argued on behalf of the wife that, absent an application for a review of the order, an application for a stay of the order cannot be maintained and that subject to certain categories of cases, a re-hearing or appeal is required to vary the order made.
Whether proceedings are interlocutory or procedural as opposed to substantive is an important fact to determine when considering section 75 of the Evidence Act and also section 94AA of the Family Law Act 1975 (Cth) (“the Act”). In relation to section 75 of the Evidence Act1995 (Cth) there are different rules which apply to the admission of evidence in interlocutory civil proceedings as opposed to civil proceedings which seek substantive orders. In relation to section 94AA of the Act, leave is required to commence an Appeal against an interim or procedural order. There is a body of law which has grown around the disputes which attend both those sections.
In Halsbury’s Laws of Australia, online version, current as at January 2010, the following definition of “interlocutory” appears (at 325-2700, footnotes omitted):
Interlocutory applications are applications made within proceedings for the purpose of preserving the status quo until the parties’ rights can be determined, or for the purpose of dealing with the formalities which it is necessary to attend to before trial, such as particulars, discovery and interrogation. The distinction between applications which are interlocutory and those which are final is often a fine one. The distinction may be important for evidentiary purposes or as to the right of appeal. Generally, an interlocutory application is an application which seeks any order other than the final judgment or decree sought to be pronounced in an action. When the order sought is a temporary order, intended to operate only until an application for a more extended order can be heard, the application and order are properly described as ‘interim’. An interim order is a particular form of interlocutory order. Commonly, an interim order is expressed to operate for a short period only, expiring on a date specified in the order.
In the Full Court decision of Alfasi & The Alfasi Group (2006) FLC 93-271, the Court said (at 80582): “[g]iven the subject matter of the proceedings, namely the striking out of a subpoena which is interlocutory in nature, it is clear that leave to appeal the decision is required.”
In Re M (Delegation of Powers to Deputy Registrars) (supra), the Full Court of the Family Court of Australia considered the delegation of the power to Deputy Registrars to make consent orders, s37 of the Act providing that “…the officers of the Court have such duties, powers and functions as are given by this Act or the standard Rules of Court or by the Chief Judge”. In turn s37A of the Act provides the power to delegate powers to Registrars (which definition includes Deputy Registrars (s37A(15)).
The Full Court went on to consider whether the Judges had delegated to the Deputy Registrars the power to make a court order pursuant to s79 and s80(1)(j). Rule 18.06(1) provides that:
(1)Each power of the court mentioned in an item of Table 18.4 is delegated to each Deputy Registrar.
The Full Court considered the powers delegated to Deputy Registrars as set out in Table 18.4 in Rule 18.06(1) which in this case was in relation to the making of consent orders and said (at 83486):
“In summary, the scheme of the Rules in relation to the delegation of the powers of judges is very clear. In relation to the jurisdiction under Part VIII of the Act Deputy Registrars have the power to make a consent order pursuant to s 79 for property settlement. The conferral of this power is made clear by item 9 in Table 18.4 in r 18.06(1) and item 11 in Table 18.5 in r 18.06(2) of the Rules.”
I conclude that the Deputy Registrar was exercising delegated power appropriately when she ordered the release of the solicitors’ file produced on subpoena on 21 November 2008. I am satisfied that the release of the file for inspection by the parties was a procedural or interlocutory order and not a substantive order.
It follows that if the order is a procedural one then it may be altered or varied if the justice of the circumstances requires that happen.
It has been submitted by the wife that once the Deputy Registrar had made the first order on 21 November 2008 releasing the documents for inspection then a reversal or setting aside of that order could only be enabled by a review of the decision before a Judge. I do not accept that is so in the circumstances of this case. While there may be circumstances where a decision of Deputy Registrar may not be able to be altered and requires a review application to be determined by a Judge I do not consider that is the case in this matter.
As I see the situation in this case, the Deputy Registrar made a determination in the absence of one of the parties. The order made at that time was based upon an assumption that the husband was not claiming legal professional privilege in circumstances where the Court would normally expect that he would. Later in the morning the absent party appeared before the Court and explained the circumstance of the earlier absence. The circumstance which had occurred because of the absence of the husband’s solicitor when the subpoena was first called had the potential to cause a great injustice if it was not remedied. There was an application before the Deputy Registrar to discharge the earlier order releasing the papers for inspection. The Deputy Registrar did discharge the order and adjourned the matter so that she could reconsider the wife’s application for release of the documents for inspection at a time when she could hear argument from each of the parties. The Deputy Registrar did nothing more than the circumstances of the case required at that time to avoid an injustice. The Deputy Registrar may have chosen to stay the order until further argument in the presence of each party could take place however, I do not see that option as the only one available.
Did waiver of legal professional privilege occur in relation to the contents of the file produced by Meyer Pigdon as a result of the inspection made of that file by the wife’s solicitors on 21 November 2008 or the wife’s counsel after that date?
Counsel for the wife referred to the High Court of Australia decision in Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49. The majority of the High Court of Australia (Gleeson CJ, Gaudron, Gummow and Callinan JJ, McHugh and Kirby JJ dissenting) in that decision reformulated the common law test for legal professional privilege to the dominant purpose test. In brief, that test provides that legal professional privilege attaches to confidential communications made for the dominant purpose of giving or receiving advice or assistance or for use in existing or anticipated litigation.
In Mann v Carnell [1999] 201 CLR 1, the majority (Gleeson CJ, Gaudron, Gummow and Callinan JJ) considered the issue of a waiver of privilege at common law. Their Honours said (at page 13, emphasis added, footnotes omitted):
30.“Waiver may be express or implied. Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. When an affirmative answer is given to such a question, it is sometimes said that waiver is "imputed by operation of law". This means that the law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the subjective intention of the party who has lost the privilege…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.”
Their Honours went on to say (at page 15, footnotes omitted):
34.“…Disclosure by a client of confidential legal advice received by the client, which may be for the purpose of explaining or justifying the client's actions, or for some other purpose, will waive privilege if such disclosure is inconsistent with the confidentiality which the privilege serves to protect. Depending upon the circumstances of the case, considerations of fairness may be relevant to a determination of whether there is such inconsistency. The reasoning of the majority in Goldberg illustrates this.”
In Stamp and Stamp (2007) FLC 93-314 the Full Court of the Family Court of Australia (Finn, May and Boland JJ) allowed an appeal by the husband to examine the file of the wife’s former solicitors. Leave had previously been granted by a Registrar to inspect the documents produced by the solicitors who had previously acted for the wife. That decision was overturned by the trial Judge. Ultimately, by a majority decision of the Full Court, inspection of the file was allowed. I do not here set out any particular quotations from this Judgment. Aspects of the decision are set out below.
Justice Cronin, at first instance, in Mark and Messina [2009] FamCA 1021, recently considered the issue of legal professional privilege in relation to a solicitor’s file produced pursuant to a subpoena and considered the decision of the Full Court in Stamp and Stamp (supra). Justice Cronin considered the case law as follows:
21.“The question to be asked is whether the mother’s actions as set out in paragraph 79 above are inconsistent with the maintenance of the confidentiality of the communication.
22.Much depends upon how one interprets the expression “puts in issue”. This Court is not a court of pleadings and as such, there is something to be said for the submission by Mr Bartfeld that no-one knows exactly how the mother is going to run her case. However some guidance can be obtained from the decision of the Full Court of this Court in Stamp and Stamp (2007) FLC 93-314. In that case, parties had consented to final financial orders in 2003. In 2004, the wife sought to set aside the orders under s 79A(1)(a) on the basis, amongst other things, of her mental state at the time that the orders were made. On the return of the proceedings at an interlocutory stage, an order was made that the wife provide particulars of her claim. In compliance with the order, a letter by the wife’s solicitors was written to the solicitors for the husband setting out the particulars, said:
The status of her health at the time she entered into the consent orders as affecting her capacity to provide proper instructions in relation to the proposed terms.
On the basis of that statement, Stephenson J rejected an argument that there had been a waiver of privilege and refused to allow the husband to examine the wife’s former solicitor’s file. On appeal, Finn J said:
13.I agree with her Honour’s analysis that the only issue which the wife had placed in issue at that time, and then only by means of the letter from her solicitors dated 16 December 2004, was “the status of her health at the time she entered into the consent orders as affecting her capacity to provide proper instructions”.
…
17.It may very well be that once affidavits are filed (bearing in mind that there are no pleadings in this court), different issues may emerge which might justify a further application and indeed an order for inspection.
18.But in my view, the claim to inspect the solicitor’s file at the time it came before her Honour and on the basis of the material then filed was premature.
23.Finn J would have refused inspection of the file.
24.However, May and Boland JJ disagreed and forming the majority said:
57.It seems that the wife proposes that the head injury of 1996 produced a mental disability, which affected her capacity to provide proper instructions to her solicitors when she agreed to consent orders in December 2003. There is expected to be medical evidence about any disability. The workers compensation records may provide evidence about her injury.
58.If there was a disability, then there must be an issue about the extent to which it affected her capacity to give instructions to her solicitors and how it affected her proper settlement of the property dispute. That will inevitably draw attention to the role played by her solicitors, and any advice to and influence upon the wife. An obvious question is what was the extent and manner of her instructions to them?
…
60.The wife has raised the issue about her capacity to provide proper instructions. That issue is inconsistent with the maintenance of her usual right to procedural legal privilege. She must be taken to have waived her right to that privilege. Accordingly we are satisfied there was an error of principle and leave should be granted.
25.Two important considerations come from both the majority and dissenting judgment. The first is that it depends upon the way in which the privilege was waived. As the majority said, pursuant to an order of the Court, particulars were provided about the disputed issue inconsistent with the maintenance of the usual right of procedural legal privilege. Their Honours anticipated that the wife proposed to call that evidence. The wife had done no more than comply with the order of the court and set out what her claim was to be for the purposes of s 79A. If the wife put her state of mind in issue rather than the husband endeavouring to do so, it is clear that her state of mind was something to which a contribution was likely to have been made by the lawyers.
26.May and Boland JJ were not concerned about the state of the evidence that might be given at trial but rather in preparing for that trial, the issue had been flagged and clearly involved the explanation of and exposure of discussion with her lawyers. That gave rise to the inconsistency with the maintenance of the right of the privilege.
27.In my view, consistently with the approach taken in Stamp (supra) this is an implied waiver and the contents of paragraph 80 do little to assist the mother. She said in paragraph 79 of the affidavit that her state of mind was being formed by her discussions with her lawyers. That is inconsistent with the maintenance of the confidentiality of the communication between she and the lawyers.
28.I find therefore that the wife has waived the privilege.”
At issue is whether the accidental failure, on the part of the husband’s solicitor, to be present at Court when the subject subpoena was called for, coupled with the resulting inspection of the file before the Court order granting leave was revoked, creates a waiver of legal professional privilege in relation to the Meyer Pigdon file. Further, does the inspection of the file by the wife’s counsel in recent time give rise to waiver of the privilege even though the order for inspection had been revoked and inspection was enabled only by an omission on the part of a court officer.
In an unreported judgment of the Federal Court of Australia, Boensch v Pascoe [2007] FCA 532, Justice Jacobson considered the issue of whether documents tendered by counsel, and forming part of an exhibit, were as a result of error and inadvertence and whether their delivery constituted a waiver of privilege. The Federal Magistrate at first instance determined that the tender was deliberate with counsel having “specifically eschewed” any suggestion of inadvertence in the tender (at paragraph 2).
The appellant submitted that, upon a proper application of Mann v Carnell (1999) (supra), there was no implied or accidental waiver of privilege in the documents. Justice Jacobson in considering the issue said;
“4. The essential reason why this issue arises is the failure of the solicitor who produced the documents to the first respondent, Mr Pascoe, and to the Court, to make proper enquiry as to the extent of the materials comprised within the documents that were produced and tendered.”
In considering the issues as they related to the specific facts of the case, and in finding that the circumstances were such that the documents were delivered as a result of error and inadvertence, Justice Jacobson went on to say:
“38. It seems to me that on either approach, what is required is a voluntary act which is inconsistent with the purpose of maintaining confidentiality. An inadvertent or unintentional act will not be sufficient to amount to waiver.
39. Of course, “a mere plea” of inadvertence may not by itself necessarily enable a party to avoid a waiver of privilege; Hooker Corporation Ltd v Darling Harbour Authority (1987) 9 NSWLR 538 at 542-543. Thus, the Court must be satisfied on the material before it that the act was in truth inadvertent.”
His Honour went on to describe the circumstances of the case which established inadvertence, namely that even when cross-examined on the documents, the solicitor did not realise that the documents in the exhibit included the documents over which the privilege issue then arose.
The decision in Boensch v Pascoe (supra) was considered by Gyles J in Unsworth v Tristar Steering and Suspension Australia Ltd [2007] FCA 1081, in which Gyles J noted that his Honour’s attention was drawn to the decision of Goldberg J in Meltend Pty Ltd v Restoration Clinics of Australia Pty Ltd (1997) 75 FCR 511, and to which Jacobson J in Boensch v Pascoe (supra), was apparently not referred, and which “…concluded that mere inadvertence or unintentional disclosure in itself is not sufficient to maintain privilege particularly where documents have been inspected” (per Gyles J at paragraph 6).
In Meltend Pty Ltd v Restoration Clinics of Australia Pty Ltd (supra) Goldberg J considered (at 526-527) that absent fraud and obvious mistake apparent to the inspecting party:
“….the appropriate principle to apply is that once inspection has been allowed of a document listed in that part of an affidavit or list in which privilege from inspection is not claimed, any privilege attaching to that document is to be regarded as waived by being included in that part of the affidavit or list and by being made available for inspection.”
Gyles J in Unsworth v Tristar Steering and Suspension Australia Ltd (supra) went on to consider the issue as follows:
“7. Faced with that apparent conflict between judges of the Court, in the time available I endeavoured to see what has happened in other courts. That exercise has further confused the picture. For example, counsel for the applicant relied heavily upon the decision of Austin J in Sovereign Motor Inns Pty Ltd v Bevillesta Pty Ltd [2000] NSWSC 521 in which privilege was maintained, notwithstanding inspection of the document by the other side. On the other hand, Austin J considered a similar question in Australian Securities and Investments Commission v Rich [2004] NSWSC 934 and held that disclosure of documents which could be described as inadvertent, in a situation not unlike the present, was held to be knowing and voluntary pursuant to s 122(2) of the Act without reference to his decision in Sovereign Motor Inns [2000] NSWSC 521. The question is further complicated where the opposing party actually has a copy of the document in his possession available to be used.
8.At about the same time that Meltend 75 FCR 511 was decided, Hunt CJ at CL in New South Wales also reviewed the authorities in some detail in Director of Public Prosecutions (Commonwealth) v Kane (1997) 140 FLR 468. That judgment provides support for the view that a document sent inadvertently or mistakenly would not be disclosed voluntarily within the meaning of s 122, particularly if the hypothetical reasonable solicitor would have realised that it had been sent by mistake. Not long afterwards, Sackville J said something similar in BT Australasia Pty Ltd v State of New South Wales (No 8) (1998) 154 ALR 202 at 208–209. The authorities have again recently been reviewed by Harper M in the Supreme Court of the Australian Capital Territory in ACTEW Corp Ltd v Mihaljevic [2007] ACTSC 39 and Willett v Belconnen Soccer Club Ltd [2007] ACTSC 41. In both cases his Honour followed Meltend 75 FCR 511. Pagone J of the Victorian Supreme Court did the same in Body Corporate No 413424 R v Sheppard [2007] VSC 179.
9.A single judge of this Court is in a difficult position given the current state of authority. It is not possible to reconcile all of the statements that have been made. However, for the purposes of this case, even if I were to apply the more restricted approach of Goldberg J, I favour maintenance of the privilege. The disclosure was inadvertent in every sense of the word and, in my opinion, an inspecting solicitor (and barrister) must have appreciated the probability of the documents having been included in the draft bundle by mistake as soon as the nature of each of the documents and the contents of them were appreciated. If it be relevant, I find that the solicitors for the respondent so concluded in the absence of evidence to the contrary.”
In Uniform Evidence Law (8th ed, 2009) Stephen Odgers considered the difficulty in the meaning of “knowing and voluntary disclosure” as it relates to a disclosure made by way of mistake (at 1.3.11080) and the author goes on to note that (footnotes omitted):
“Voluntary disclosure under a mistaken belief as to what is being disclosed would not necessarily result in loss of the privilege. Indeed it has been observed that a voluntary disclosure is a disclosure that was not made by way of mistake. On the other hand, it has been held that “the notion of a voluntary disclosure [does not exclude] a disclosure made by mistake…in circumstances where formal discovery is made”.
Stephen Odgers further writes that it is possible a disclosure may be made “knowingly” and yet by mistake, and consequently perhaps not voluntarily. Equally, the author considers that accidental disclosure would not result in a loss of privilege (Uniform Evidence Law (supra) at 1.3.11080). The author goes on to quote from the decision of Austin J in Sovereign v Bevillesta [2000] NSWSC 521 at 523 and says (footnotes omitted):
“Thus, it has been held that, whatever may be the precise limits of the words “knowing and voluntary”:
…they do not apply in a case where everything indicates an intention to claim privilege in respect of the document and what has gone wrong is attributable to sheer inadvertence or carelessness.”
In Trade Practices Commission v Arnotts Ltd and Others (1989) 88 ALR 69, Beaumont J in the Federal Court of Australia heard a matter in which Arnotts objected to the tender by the Trade Practices Commission of a note, claiming it attracted the privilege in aid of settlement. The document was discovered by Arnotts without a claim for privilege in aid of settlement being made. The questions his Honour was then required to address were (at 74): “Did Arnotts waive the privilege by discovering the document in which the statement was made” and thus “Did Arnotts thereby waive its right to claim privilege to prevent the document going into evidence?”
Whilst his Honour held that the document did attract the privilege claimed, it was admitted nonetheless into evidence because, by discovering the document, Arnotts had impliedly waived their right to object to its tender into evidence. His Honour went on to consider (at 75) that:
“Arnotts, by discovering the document, waived their right to object to its production for the purposes of discovery. But did Arnotts, thereby, also waive their right to object to its admissibility into evidence? In other words, although Arnotts expressly waived their privilege in respect of discovery of the material, did they also, by implication, waive their right to object to its admission into evidence?”
In the matter before his Honour the whole of the document had been discovered and it was not suggested that the document was discovered as a result of an oversight. However, the question before the Court was “…whether, as a matter of fairness, waiver at the anterior stage of discovery should be imputed at the later stage of reception of evidence at the trial itself” (at 75).
Beaumont J (at 75) considered the decision of the High Court of Australia in Attorney-General (NT) v Maurice (1986) 161 CLR 475 and summarised the Court’s finding as being:
“…where there is no intentional waiver of privilege the question whether waiver should be imputed depends on whether it would be unfair or misleading to allow a party to refer to or use material and yet assert that the material, or material associated with it, is privileged from production.”
His Honour concluded that:
“…fairness dictates that the waiver at the anterior stage of the proceedings should be treated as extending to all subsequent stages of the litigation. To limit the waiver to the discovery process would, in my view, lead to an artificial situation in which the Commission lawfully obtained the document on discovery but cannot use it in evidence. This would lead to an unfair result.”
In Custom Credit Corporation Ltd v Simcock (Unreported, 20 April 1994, 14 July 1994, BC9401749), Ng M in the Supreme Court of Western Australia (in chambers) considered an application in relation to the discovery of specified documents and said (at 9) that:
“The accidental provision of a copy of a document is not an abandonment or waiver of the claim for privilege: Key International Drilling Co Ltd v TNT Bulk Ships Operations Pty Ltd (1989) WAR 280; Guinness Peat Properties Ltd v Fitzroy Robinson Partnership (A Firm) [1987] 2 All ER 716.”
In the written submissions on behalf of the wife in this matter, it is argued that it is not the case proffered on behalf of the husband that the documents in the file produced by Meyer Pigdon were disclosed by way of a mistake, or that either the husband or his solicitors were unaware of the subpoena.
Rather the wife, as adumbrated in her written submissions, says the failure of the husband to object to the making of the inspection order was pivotal and is sufficient to generate a waiver of legal professional privilege. In particular it is argued on behalf of the wife that “[t]he failure to object – being aware that the substance of the matters to which privilege would be claimed would be made available – equates to a “knowing and voluntary disclosure” of the said material.”
The wife goes on to say, at paragraph 30 of her written submissions (footnotes omitted) that;
“It was not the solicitor for the husband who authorized the disclosure of the documents produced. It was not the solicitor who enabled (by way of the consent of the husband or otherwise) the disclosed the [sic] contents of the file. It was the Court. The Court did not make a mistake. The Court did not make an error. The action of the Court was not inadvertent. The solicitor for the wife acted upon the authority of the order of the Court.”
Counsel for the wife refers to the decision of Ipp JA in Divall v Mifsud [2005] NSWCA 447, and in particular paragraph 5. Further reference is made to the decision in Meltend Pty Ltd v Restoration Clinics of Australia Pty Ltd (supra), as referred to earlier in these Reasons.
Stephen Odgers addresses the confusing authority in this area and refers to the statement of Ipp JA (McColl JA agreeing) in Divall v Mifsud (supra, at 10) that the failure of the legal representative to object to questions during cross-examination in which privilege material was sought to be elicited meant that substance had been “knowingly and voluntarily disclosed to another person” (Uniform Evidence Law (supra) at 1.3.11080).
The author goes on to stay that (footnotes omitted):
“A difficulty with this analysis, as the dissenting member of the Court of Appeal, MW Campbell AJA, pointed out at [111], is that counsel had made it clear that he claimed privilege (on behalf of the party) in respect of the statement. MW Campbell AJA adopted at [113] the reasoning of Austin J in Sovereign v Bevillesta to conclude that the failure to object was “attributable to sheer inadvertence or carelessness”. After observing at [114] that counsel could not have sought a forensic advantage from the failure to object and that no one at the trial “would imagine that [counsel] had suddenly decided to abandon the claim for privilege which he had successfully pursued”, he concluded that privilege had not been waived under this provision. It has to be said that this analysis is persuasive. The approach of the majority of the Court of Appeal may in fact turn on the apparent failure on appeal to explicitly contend (or adduce evidence) that the absence of objection was the result of counsel’s mistake. However, Ipp JA stated at [5]:
Had cross-examining counsel, instead of asking the two questions which I have set out, again called for the statement – and had the statement been produced and tendered as an exhibit – that statement would have been admitted into evidence unless counsel … had objected. I can see no difference in principle between the admission of a privileged statement into evidence in circumstances where counsel for the party holding the privilege does not object, and oral evidence given by a party of the contents of that statement in circumstances where counsel for the party holding the privilege does not object.
This reasoning treats failure to object to the question as equivalent to absence of objection to admission into evidence of the privileged statement. While not entirely persuasive, this indicates that failure to object to a question seeking to elicit privileged material will usually be treated as waiver.”
The wife seeks to distinguish the present matter from cases involving an obvious and inadvertent mistake, which is plain and apparent to the recipient of the material and in relation to which the wife refers to Unsworth v Tristar Steering & Suspension Australia Ltd (supra).
I conclude the husband in this case did not knowingly and voluntarily produce the file of his former solicitor for inspection by the wife’s solicitor. The failure by the husband’s solicitor to be present when the subpoena was called was accidental. I accept that the solicitor for the husband did intend to be present at Court when the subpoena was called. Her failure to be at Court at the right time was a mistake. Her actions immediately upon learning of her mistake are testament to that fact. In my opinion the solicitor for the wife did everything she could possibly do in the circumstance to remedy her oversight.
I also conclude that the solicitor for the husband must have become aware that there had been an oversight on the part of the husband’s solicitor, as soon as she failed to appear at the calling of the subpoena before the Deputy Registrar on 21 November 2008. Ordinary experience of the solicitor for the wife ought to have told him, in the circumstances of this case, that it would be an extraordinary occurrence which would lead to the husband not opposing the inspection of his prior solicitors’ file. The solicitor for the wife must have known that the file was crucially connected with the very subject matter of the principal dispute between the parties in this case, namely, the circumstances of the husband entering into a binding financial agreement with the wife. It was clearly for that reason that the file was the subject of a subpoena issued by the wife.
Unfortunately, it seems the days of professional courtesy between solicitors have been subsumed into the desire to take advantage of what must have been an apparent oversight. I lament the passing of the days when the husband’s solicitor might have received a phone call from the wife’s solicitor enquiring “where are you?”.
I conclude the husband did not waive legal professional privilege when the file produced under subpoena by his former solicitor was either released for inspection by the Deputy Registrar and/or inspected by the wife’s solicitor.
In relation to the inspection of the subject file by counsel for the wife, after the order for inspection of the file was revoked, I conclude that could not amount to a voluntary disclosure of the file by the husband. That inspection occurred as a result of a comedy of errors. The first error was on the part of the Court. The file should have been removed from that group of documents which were otherwise available for inspection by the parties following the release of documents produced to the Court in answer to a subpoena. The solicitor for the wife should have properly instructed counsel on the events of 21 November 2008. The counsel for the wife should have become aware of an error or omission on the part of the husband’s solicitors as soon as he saw the solicitors’ file during the inspection of the documents.
I conclude that the husband did not knowingly or voluntarily provide the solicitors’ file for inspection by the wife’s counsel after the order was made by the Deputy Registrar on 21 November 2008 revoking the order for inspection of those documents which she had made earlier the same day.
Is there implied waiver of legal professional privilege in relation to any category of documents or communications arising out of the specific portions of the husband’s affidavit sworn on 10 September 2008 as relied upon by the wife?
The wife submits that the husband, in paragraph 6 and paragraph 10 (first sentence) of his affidavit sworn 10 September 2008, impliedly waived legal professional privilege.
Legal privilege can be waived expressly or impliedly, where the conduct is inconsistent with the maintenance of the privilege, as discussed by the High Court of Australia in Mann v Carnell (supra, at page 13). The High Court in that case set out the objective test for the implied waiver of privilege, as considered above. Relevantly to the current issue their Honours at page 15 also said:
“…Disclosure by a client of confidential legal advice received by the client, which may be for the purpose of explaining or justifying the client’s actions, or for some other purpose, will waive privilege if such disclosure is inconsistent with the confidentiality which the privilege serves to protect…considerations of fairness may be relevant to a determination of whether there is such inconsistency.”
The Full Court of the Federal Court in Bennett v Chief Executive Officer, Australian Customs Service (2004) 210 ALR 220, Tamberlin and Gyles JJ (Emmett J dissenting), applied the principles as to waiver as considered by the majority of the High Court of Australia in Mann v Carnell (supra).
In allowing the appeal in respect of the waiver issue, Gyles J (with whom Tamberlin J agreed) held (at paragraph 65) that: “[t]he voluntary disclosure of the gist or conclusion of the legal advice amounts to waiver in respect of the whole of the advice to which reference is made including the reasons for the conclusion.” His Honour found that the primary Judge had erred in drawing a distinction between the conclusion expressed in legal advice, as distinct from the reasoning, which led to a finding that disclosure of the conclusion did not involve disclosure of the reasons.
Tamberlin J (at paragraph 6) held that the disclosure expressed the substance of the advice and considered that (emphasis added):
“…In my view, it would be inconsistent and unfair, having disclosed and used the substance of the advice in this way, to now seek to maintain privilege in respect of the relevant parts of that advice which pertain to the expressed conclusion. It may perhaps have been different if it had been simply asserted that the client has taken legal advice and that the position which was adopted having considered the advice, is that certain action will be taken or not taken. In those circumstances, the substance of the advice is not disclosed but merely the fact that there was some advice and that it was considered. However, once the conclusion in the advice is stated, together with the effect of it, then in my view, there is imputed waiver of the privilege. The whole point of an advice is the final conclusion. This is the situation in this case.”
I find that the reasoning of Tamberlin J, as set out in the following paragraphs, offers further guidance for present purposes (emphasis added):
12. While it is true that questions of fact and degree may be involved in determining whether the conduct or circumstances are such that waiver can be imputed, nevertheless, there is an underlying principle of law to be resolved as to what in law may or will constitute a waiver. In these circumstances, I do not consider that it can be said to be merely a question of fact and degree so that an appellate court cannot re-examine the matter and come to a different conclusion. In this case, the “detail” of the advice has not been disclosed, but there is no doubt that the substance of the conduct has been stated. Hence, not only is the “legal stance” or “position” disclosed but also the interpretation which has been advised as correct. The question whether this is a waiver necessarily involves the consideration and application of legal principles, as the appellate authorities on waiver demonstrate.
13. Various expressions are used in the formulation of principles relating to waiver of legal professional privilege, such as references to “the substance”,“effect” or “content” of the advice. The weight of the authorities, in my view, supports the conclusion that the disclosure of the conclusion reached in or course of action recommended by, an advice can amount to waiver of privilege in respect of the premises relating to the opinion which has been disclosed, notwithstanding that this reasoning is not disclosed. By way of illustration, if there is a disclosure that a client has been advised that interpretation “A” is preferable to interpretation “B” of a legislative provision, then even if there is no disclosure of the reasoning leading to that conclusion, the reasoning and content of the advice may be waived, including the factual premises and circumstances leading to that conclusion.
The issue of recording the receipt of legal advice and disclosing the substance of that advice was considered by Young J in AWB Ltd v Cole and Another (2006) 232 ALR 743. His Honour said (at 136):
“In my view, the distinction between a mere reference to advice having been obtained, and a reference that discloses the content or substance of the advice, has not been eliminated by the High Court’s restatement of the relevant principles as to waiver in Mann v Carnell (1999) 201 CLR 1… .”
In relation to paragraph 10 of the affidavit, I note the stance taken by Rolfe J in Ampolex Ltd v Perpetual Trustee Company (Canberra) Ltd (1996) 40 NSWLR 12, in considering what was meant by the “substance” and the “effect” of legal advice said (at 19), “[i]n my opinion the substance of the advice may well be disclosed if the ultimate conclusion, without the supporting process, is revealed.” Kirby J in Ampolex Ltd v Perpetual Co (Canberra) Ltd (1996) 137 ALR 28 at 34 agreed that a mere reference to the existence of legal advice would not amount to a waiver of the contents of that advice.
One matter which needs to be considered, in my opinion, in determining whether legal professional privilege has been waived is whether it can be seen that there is a relevant connection between the statement or action relied upon in creating the alleged waiver of legal professional privilege and an issue for determination in the proceedings before the Court. This statement might sound trite however, given the propensity of the legal fraternity practicing in this Court, to make an application alleging waiver of legal professional privilege, it is an important statement to make.
In this case there is no issue between the parties that a binding financial agreement was signed. There is no issue that each party was represented by a solicitor in the preparation and execution of the agreement. The wife’s case for the setting aside of the agreement is outlined in the “Outline of Submission on behalf of the wife” provided to the court on 30 September 2009. That document identifies a document filed by the wife on 15 January 2009 and titled “Amended Notice”. That document is said to contain particulars of the case the wife makes for the setting aside of the financial agreement entered into between the parties.
Arising from the “Amended Notice” the wife claims the following:
(a)She did not have the requisite capacity to enter into the agreement by reason of her mental capacity which had been affected by the husband’s conduct, her pregnancy at that time, her health at that time and her other life circumstances;
(b)She was mistaken as to the effect of the Financial Agreement;
(c)She did not receive accurate, proper and appropriate advice in relation to the agreement;
(d)She relied upon representations made by the husband at the time of entering into the agreement;
(e)The terms and effect of the Agreement operate to the detriment of the wife; and
(f)The terms and effect of the Agreement are manifestly unjust and inequitable to the wife.
Turning then to consider each of the portions of the husband’s affidavit said by the wife to amount to waiver of legal professional privilege, the first portion of the affidavit is at paragraph 6 of the husband’s affidavit sworn 10 September 2008. The following words are relied upon: “I contacted my then solicitor, Max Meyer, who suggested we put in place a postnuptial agreement before accessing the funds in the Trust.”
The first question to be determined is whether the husband had disclosed and used the substance of the advice? Clearly the words “who suggested we put in place a postnuptial agreement before accessing the funds in the Trust” is disclosing the substance of advice. The husband has used the substance of the advice both in the sense that he acted upon it and secondly that he specifically included it in his evidence supporting his case opposing the setting aside of the agreement.
Perhaps this case demonstrates the importance of framing and drafting of affidavits prepared for court proceedings. It seems that had the husband said simply: “I saw my solicitor. A financial agreement was drawn.” It would not amount to “disclosing the substance of advice”.
Given that the husband has disclosed and used the substance of the advice what documents in the solicitors’ file might then fall into a category to which legal professional privilege has been waived? In my view the category would include:
(a)All documents noting instructions from the husband prior to the advice being given; and
(b)All documents containing the advice to the husband to proceed to obtain agreement with the wife to enter into a financial agreement.
The second portion of the husband’s affidavit relied upon by the wife is in the first sentence of paragraph 10. The words are: “I first met with Mr Meyer in about December 2000 and gave him general instructions about what the wife and I had jointly agreed should be in the agreement.”
This portion of the affidavit does not disclose advice from a lawyer but rather is said to disclose instructions to a lawyer which are also the subject of legal professional privilege. In this case however, the husband does not disclose the content or substance of his instructions. There is no issue between the parties as to the content of the agreement. It is not part of the wife’s case (as seen in the “Amended Notice”) that there was either mutual or unilateral mistake as to the content, terms or conditions of the agreement. Even if the statement did amount to a disclosure of the substance of the instruction as to the nature and terms of the agreement the husband says existed at that time between the parties, it is not relevant to any particular issue in the case.
I therefore determine that the words identified in paragraph 10 of the husband’s affidavit do not amount to a waiver of legal professional privilege.
I propose to make an order requiring the husband’s lawyers to make available for inspection by the wife’s solicitors those parts of the file produced to the court by Meyer Pidgon which fit within the description of:
(a)All documents noting instructions from the husband prior to the advice being given.
(b)All documents containing the advice to the husband to proceed to obtain agreement with the wife to enter into a financial agreement.
Given that the wife’s lawyers have already inspected the subject file they will be in the unusual position of being able to know whether all of the relevant documents have been provided. In most cases such a course is not available to the court and the usually adopted course is to have the judge adjudicating the dispute inspect the whole of the file to ensure compliance with the order.
If, following inspection by the wife’s solicitors of those documents produced by the husband, there remains a dispute about proper compliance with the order then I will need to inspect the balance of the file to ascertain if there is any other document which should properly be released.
Is there power for the Court to make an order restraining the wife’s solicitors from further acting for the wife in the proceedings and making further orders restricting the wife’s solicitors from disseminating any information obtained by them as a result of inspecting the Meyer Pigdon file, notwithstanding that the Court has found there has been a relevant waiver of legal professional privilege arising out of the circumstances of the inspection of the file by the wife’s solicitors on 21 November 2008? If there is such a power, should it be exercised in this case?
The three main bases upon which the Court can restrain a solicitor from acting on behalf of a party were outlined by Brereton J upon a review of the authorities in Kallinicos & Anor v Hunt & Ors [2005] 64 NSWLR 561; (2005) NSWSC 1181 (22 November 2005). Those circumstances include one where a solicitor was previously acting for a client and there is a risk of disclosure or misuse of material which is confidential to that former client; a breach of fiduciary obligations and the court’s inherent jurisdiction to maintain authority in relation to legal practitioners.
In McMillan and McMillan (2000) FLC 93-048, the Full Court of the Family Court of Australia (Finn, Kay and Moore JJ) reviewed the English and Australian authorities on the court’s power or capacity to restrain a solicitor from acting for a party, such cases typically involving situations where the solicitors have acted for both the husband and wife.
The Full Court (at 87,733) accepted the views of Mullane J in In the marriage of Griffis and Griffis (1991) FLC 92-233, namely that;
“… the client need only prove “a prima facie case as to confidential material, the disclosure or use of which by the solicitors in the course of the conduct of the current proceedings for the present client would be prejudicial to the applicant”.”
The Full Court went on to say (at 87,739):
87.“In other words, the client need only give evidence that he has provided confidential information to the solicitor (or in this case, the law clerk/secretary). The client does not have to divulge the content of that information. (See Mills and also Lindenmayer J. in Stewart). In the present case, we consider it sufficient, as we said earlier, that the husband has sworn that he had given instructions to Mr Pitts as to how he wished his “matter to be conducted and the position to be put to the wife”. It is obvious that such matters would come within the description of “confidential information”.”
The approach that was adopted by the Full Court was that of a theoretical risk of prejudice as distinct from proof of actual prejudice, as being the appropriate approach in cases involving the dismissal of legal practitioners in the family law jurisdiction.
The Full Court in McMillan (supra) further cited the review of the case law in a decision of Lindenmayer J in Stewart (unreported, 17 April 1997), and quoted part of His Honour’s decision (at paragraph 56) as follows:
“All that is necessary is that the wife swears that she has conveyed confidential information to the solicitors and that she believes, not unreasonably, that information may be used against her, or at least to her disadvantage, in these current proceedings.”
In Pond & Thurga (No 2) [2007] FamCA 587, O’Ryan J, having considered the Full Court decision in McMillan (supra), went on to say:
215.In relation to the third ground the test to be applied when determining whether the inherent jurisdiction may be invoked was articulated by Brereton J in Kallinicos v Hunt (supra) at [76] namely whether a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that a legal practitioner should be prevented from acting, in the interests of the protection of the integrity of the judicial process and the due administration of justice, including the appearance of justice. This formulation of the test was adopted and applied by Young J in Geelong School Supplies Pty Ltd v Dean (supra) in determining to restrain a solicitor from acting.
216.However the authorities stress that this inherent jurisdiction is an exceptional one and must be exercised with caution: Kallinicos v Hunt (supra) at par 76; Geelong School Supplies Pty Ltd v Dean (supra) par 35; Grimwade v Meagher [1995] 1 VR 446; Bowen v Stott [2004] WASC 94. In particular, these cases say that “due weight” should be given to the public interest in a litigant not being deprived of a lawyer of choice without due cause.
217.Further the timing of an application may be relevant because as Brereton J in Kallinicos v Hunt (supra) said at [76] said that: “…[t]he cost, inconvenience or impracticality of requiring lawyers to cease to act may provide a reason for refusing to grant relief”.
In the Supreme Court of Western Australia, Heenan J in Holborow & Ors v MacDonald Rudder (2002) WASC 265 (15 November 2002), described counsel’s obligation to the court as being a “paramount duty” and went on to say (at paragraph 28):
“If there are circumstances which are likely to imperil the discharge of these duties to a court by a legal practitioner acting in a cause, whether because of some prior association with one or more of the parties against whom the practitioner is then to act, or because of some conduct by the practitioner, whether arising from associations with the client or a close interest which gives rise to the fair and reasonable perception that the practitioner may not exercise the necessary independent judgment, a court may conclude that the lawyer should be restrained from acting, even for a client who desires to continue his service …”.
In this case I consider there may be appropriate ground to restrain the wife’s solicitor and counsel from acting further in this matter insofar as they have seen the whole of the file produced to the Court by the husband’s former solicitor. However, I have determined that a part of that file should be made available for inspection by the wife’s solicitor consequent upon a waiver of legal professional privilege. It may be that is the only portion of the file which would cause any prejudice to the husband.
I propose to defer any determination on this issue until I have had the opportunity to hear further argument and perhaps take further evidence in the case.
I certify that the preceding one hundred and twenty one (121) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Le Poer Trench
Associate:
Date: C. Langham
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