Riemann and Riemann and Ors
[2017] FamCA 788
•4 October 2017
FAMILY COURT OF AUSTRALIA
| RIEMANN & RIEMANN & ORS | [2017] FamCA 788 |
| FAMILY LAW – PROCEDURAL – INTERIM PROCEEDINGS – Where the wife has retained new solicitors – Where the wife now seeks to amend her application to challenge a transaction and to join third parties – Whether the wife has impliedly waived legal professional privilege in respect to communications with her previous and current solicitors – Whether the husband is required to comply with an obligation agreed to in previous orders to identify and provide documents to which he claims legal professional privilege – Court finds that the wife has waived legal professional privilege in respect to the subject matter of communications contained in an affidavit and also in written submissions – Court finds that the husband should not be required to incur additional expense in providing documents which are not relevant to the proceedings and which he is not otherwise required to provide pursuant to Part 13 of the Family Law Rules 2004. |
| Family Law Act 1975 (Cth) s 121 |
ACCC v Construction, Forestry, Mining and Energy Union [2008] FCA 678
Attorney-General (NT) v Maurice (1986) 161 CLR 475
Australian Competition and Consumer Commission v Prysmian Cavi E Sistemi Energia S.R.L. (No 10) [2015] FCA 763
Australian Medi-Care Co Ltd v Hamilton Pharmaceutical Pty Ltd (No. 3) [2008] FCA 976
Cadbury Schweppes Pty Ltd v Amcor Limited (2008) 246 ALR 137
Causton v Mann Egerton (Johnsons) Ltd [1974] 1 All ER 453
Commissioner of Taxation v Coombes [1999] FCA 842
Complete Technology Pty Limited v Toshiba (Australia) Pty Ltd (1994) 53 FCR 125
Dalton & Dalton [2017] FamCAFC 78
DSE (Holdings) Pty Ltd v Intertan Inc and Anor [2002] WASC 107
Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited [2013] HCA 46
Fulham Leisure v Nicholson Graham & Jones [2006] All ER 599
Goldberg v Ng Hango Holdings Pty Ltd [1995] HCA 39
Grant v Downs [1976] HCA 63
Great Atlantic Insurance Co v Home Insurance Co [1981] 2 All ER 485
Harold John Goldberg and Yona Goldberg v Bernard Ng, Hango Holdings Pty Limited And Cheryl Ng (1995) 185 CLR 83
Howarth and Norman [2003] FamCA 613
Liberty Funding Pty Ltd v Phoenix Capital Limited (2005) 218 ALR 283
Macquarie Bank Limited v Arup Pty Limited [2016] FCAFC 117
Mann v Carnell [1999] HCA 66; 201 CLR 1; 168 ALR 86; 74 ALJR 378
Nea Karteria Maritime Co Ltd v Atlantic & Great Lakes Steamship Corporation [No. 2] [1981] Com. L.R 138
Nilsen Industrial Electronics Pty Ltd v National Semiconductor Corporation (1994) 48 FCR 337
Standard Chartered Bank of Australia Ltd v Antico (1993) 36 NSWLR 87
Thomason v Council of the Municipality of Campbelltown (1939) 39 SR (NSW) 347
Woodgate (Trustee) v Northop Hall Pty Ltd [2016] FCA 370
| APPLICANT: | Mr Riemann |
| RESPONDENT: | Ms Riemann |
SECOND RESPONDENT: Ms Lindrum
THIRD RESPONDENT: Ms Gildas
INTERVENOR: Mr Aaron
| INDEPENDENT CHILDREN’S LAWYER: | Legal Aid NSW |
| FILE NUMBER: | SYC | 5764 | of | 2014 |
| DATE DELIVERED: | 4 October 2017 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | McClelland J |
| HEARING DATE: | 19 September 2017 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Levet |
| SOLICITOR FOR THE APPLICANT: | Broun Aaron Burreket |
| COUNSEL FOR THE RESPONDENT: | Mr O'Ryan QC and Mr Richardson SC |
SOLICITOR FOR THE RESPONDENT: | Bridges Lawyers |
COUNSEL FOR THE SECOND RESPONDENT: | In person |
COUNSEL FOR THE THIRD RESPONDENT: | No appearance |
| COUNSEL FOR THE INTERVENOR: | Mr Henry |
| SOLICITOR FOR THE INTERVENOR: | Hoffman & Koops |
| SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: | Legal Aid New South Wales |
Orders
THE COURT ORDERS THAT:
Within seven (7) days of the date of this order the wife do all acts and things necessary to cause the solicitors who have acted for or received instructions from the wife during the period 8 April 2014 and 10 June 2017 ("the Wife's legal representatives") including but not limited to:
a. Uther Webster & Evans Pty Limited;
b. Lander & Rogers Lawyers; and
c. York Law Family Law Specialists
to produce to the exhibits office of the Sydney Registry of the Family Court of Australia, unredacted and unaltered, all letters, emails, file notes, and other documents and records as may have come into existence between 8 April 2014 and 10 June 2017, that record communications as between the wife and the wife's legal representatives (or any employee of the wife's legal representatives), in respect to:
(i) The transfer by W Pty Ltd (ACN …) as Trustee for the X Family Trust of all its interest in Z Pty Ltd ACN … to Y Pty Ltd ACN … as Trustee for the AA Family Trust pursuant to Sale and Purchase Agreement dated 18 September 2013, completed on or about 28 February 2014.
(ii) Transactions entered into between the husband and Mr Aaron in the period subsequent to 17 September 2014.
(iii) Transactions entered into between any entity owned or controlled by the husband and any entity owned or controlled by Mr Aaron in the period subsequent to 17 September 2014.
(iv) Payments received by the husband, in the period subsequent to 17 September 2014, from Mr Aaron and/or any entity owned or controlled by Mr Aaron.
(v) Payments received by any entity owned or controlled by the husband, in the period subsequent to 17 September 2014, from Mr Aaron and/or any entity owned or controlled by Mr Aaron.
(vi) All communication and documentation evidencing the extent to which the wife’s previous solicitors had possession and/or control of the documents now in the possession of the wife’s current solicitors which have been described in these proceedings as the E-documents.
(2) Within seven (7) days of the date of these orders the wife do all acts and things necessary to cause her current solicitors to produce to the exhibits office of the Sydney Registry of the Family Court of Australia, all communication and documentation evidencing the extent to which her current solicitors have possession and/or control of the documents described in these proceedings as the E-documents and the dates when that occurred.
(3) Order 11(d) of the orders made on 31 July 2017 is amended by deleting all words after 2 August 2017.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Riemann & Riemann & Ors (No. 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 5764 of 2014
| Mr Riemann |
Applicant
And
| Ms Riemann |
Respondent
And
| Ms Lindrum |
Second Respondent
And
Ms Gildas
Third Respondent
And
Mr Aaron
Intervenor
And
Legal Aid NSW Sydney
Independent Children’s Lawyer
REASONS FOR JUDGMENT
INTRODUCTION
The parties are engaged in protracted parenting and property proceedings. They have incurred considerable expense in doing so. This matter had been set down for hearing for ten days commencing 13 June 2017 but was adjourned as result of the inability of the wife to be in attendance at Court. The circumstances regarding the wife’s non-attendance are a matter of controversy which does not need to be resolved at this stage of the proceedings. The matter has been adjourned until January 2018 at which time it is anticipated that the hearing will proceed over a ten day period.
In the period since June 2017 the wife has retained new legal advisers. Those new legal advisers have sought procedural orders including the granting of leave to file an Amended Response seeking orders to set aside a transaction that occurred in September 2013. The solicitor for the wife, Mr Mr BB, has filed two affidavits in support of the wife’s application.
The first matter to be determined in this decision is whether, as result of a paragraph contained in the affidavit of Mr BB, sworn 13 September 2017, the wife has impliedly waived legal professional privilege in respect to communications with her previous solicitors.
The second matter to be determined is whether, as result of a contention set out in the written submissions of the wife, the wife has waived legal professional privilege in respect to communication with her previous and current solicitors.
The final matter to be determined is whether the husband should be permitted to depart from an obligation that he agreed to in order 11(d) of the orders made on 31 July 2017 (“the order”). That order required the husband to examine documents which, on a preliminary basis, have been categorised as potentially being the subject of legal professional privilege. The husband seeks to be relieved of his obligation as a result of subsequently ascertaining that there are approximately 110,000 documents to be examined. As a result, he submits there would be a substantial cost involved in undertaking the task envisaged by the order.
BACKGROUND
Each of the parties completed detailed chronologies in preparation for the hearing which was to commence on 13 June 2017. In these proceedings it is not necessary to set out the parties’ contentions in respect to the entirety of the history of their relationship. It is sufficient to note that the parties met in 1990. There is a dispute as to the nature of the parties’ relationship subsequent to the parties’ meeting and until November 1998 when they became engaged. It is common ground that the parties cohabited in the period after November 1998 and that they married in 1999. The husband contends that the parties separated in May 2013 however, the wife contends that the parties separated on 19 December 2013.
The transaction which is the subject of controversy was described in the husband’s chronology as follows:
… [X] Trust’s interest in the [Z] Partnership, was sold to [Y] as trustee for The [AA] Family Trust… The interest was sold for $1,222,500 and the proceeds of sale were applied towards payment of the renovation costs and living expenses. In addition to the sale price of $1,222,500 [Mr Aaron] agreed to pay 50 per cent of any profit from the interest held by the [Z] Partnership in what was called the [CC] project. [Mr Aaron] also agreed, despite the sale being effective as from September 2013, to pay to me 50 per cent of the income from a property at [Suburb DD] until 30 June 2014.[1]
[1] Husband’s Case Outline dated 29 August 2017 at [31 – 32].
The wife does not accept the husband’s characterisation of that transaction and seeks to have it set aside.
The wife also seeks orders extending the time for both parties to comply with the order. The orders sought by the wife are set out in her Amended Application in a Case filed on 6 September 2017 and are as follows:
1.That time for compliance by the Wife with Order 12(b) made on 31 July 2017 be further extended for 21 days following compliance by the Husband with his obligations pursuant to order 11(d) made on 31 July 2017.
2.That [Y] Pty Ltd ACN … as Trustee for the AA Family Trust be joined as a party to one of the proceedings.
3.That [Mr Aaron] be joined as a party to the proceedings.
4.That leave be granted to the wife to:
(a)amend her Response filed 27 October 2014 by the insertion of the following orders sought
“That pursuant to Section J06B(l) of the Act that the purported transfer by [W] Pty Ltd (ACN …) as Trustee for the [X] Family Trust of all that its interest in [Z] Pty Ltd ACN … to [Y] Pty Ltd ACN … as Trustee for the [AA] Family Trust pursuant to Sale and Purchase Agreement dated 18 September 2013, completed on or about 28 February 2014 (“The [Z] Disposition”) be set aside.”
and
“That pursuant to Section 106B(4) of the Act Mr Aaron pay the Wife’s costs of and incidental to the [Z] Disposition and the setting aside of [Z] Disposition.”
(b)Within 21 days of compliance by the Husband with his obligations pursuant to Order 11(d) made 31 July 2017, to file a Further Amended Response in respect of financial matters.
5. That within 21 days [Y] Pty Ltd file any Response on which it seeks to rely.
6.That within 21 days [Mr Aaron] file any Response on which he seeks to rely.
The husband’s Response to the Wife’s Amended Application in a Case, filed 14 September 2017 (“the husband’s Amended Response”), sought both property and parenting orders. It is only the proposed orders, in respect to property, that are relevant in these proceedings. The proposed orders are as follows:
1.That the wife's Amended Application in a Case filed 6 September 2017 be dismissed.
2.That pursuant to s.118 of the Family Law Act 1975 (Cth) ("the Act") the wife be and is hereby restrained from seeking to prosecute any relief under s.106B of the Act or in any way seeking to further amend the relief she is seeking on a final basis in the proceedings.
3.That within seven days of the date of this order the wife do all acts and things necessary to cause the solicitors who have acted for or received instructions from the wife during the period 8 April 2014 and 22 August 2017 ("the Wife's legal representatives") including but not limited to:
(a)Uther Webster & Evans Pty Limited;
(b)Lander & Rogers Lawyers;
(c)York Law Family Law Specialists; and
(d)Bridges Lawyers;
to produce to the exhibits office of the Sydney Registry of the Family Court of Australia, unredacted and unaltered, all letters, emails, file notes, and other documents and records as may have come into existence between 8 April 2014 and 22 August 2017, that record communications as between the wife and the wife's legal representatives (or any employee of the wife's legal representatives), in any form touching upon any fact relevant to any aspect of [Z] Pty Ltd and the interest of the husband and or the [X] Trust in [Z] Pty Ltd and thereafter the Respondent's legal representatives shall be at liberty to inspect such documents/records produced.
4.That the wife be and is hereby restrained from seeking to rely in the proceedings on any of the "e documents" as referred to in Orders 11 and 12 of the Orders of 31 July 2017, save for the documents provided at 12:03am on 13 June 2017 by email from the wife's former lawyers Lander and Rogers to Broun Aaron Burreket.
5.That in the alternative to Order 4 above, within seven days of the date of the making of this Order the Wife pay the sum of $700,000 into the Trust Account of the husband's legal representatives, Broun Aaron Burreket Family Lawyers to be applied to the husband's costs of his compliance with Order 11(d) of the Orders made 31 July 2017.
6.That the husband be relieved of his obligation to comply with Order 11(d) of the Orders made 31 July 2017 until after the Wife's compliance with Orders 5.
The Intervenor sought the following orders set out in the Response to an Application in a Case filed 14 September 2017:
1.That orders 2 to 6 in the Amended Application in a Case filed 6 September 2017 [The Wife’s Amended Application in a Case] be dismissed.
EVIDENCE
The wife relied on the following documents:
·Amended Application in a Case dated 6 September 2017;
·Affidavit of Mr BB sworn 6 September 2017;
·Affidavit of Mr BB sworn 13 September 2017;
·Affidavit of Wife sworn 25 August 2017;
·Affidavit of Mr BB sworn 18 September 2017; and
·Various extracts of evidence previously filed in these proceedings and documents relevant to these proceedings referred to in submissions.
The husband relied on the following documents:
·Response to an Application in a Case filed 15 September 2017;
·Affidavit of Mr Riemann affirmed and filed 15 September 2017 and Exhibit MR-1;
·Affidavit of Ms EE sworn and filed 15 September 2017;
·Affidavit of Mr FF sworn and filed 15 September 2017;
·Affidavit of Mr GG sworn and filed 15 September 2017; and
·Affidavit of Ms HH sworn and filed 15 September 2017.
Issues of controversy
The first issue of controversy is whether, as a result of what is stated in paragraph 38(b) of Mr BB’s affidavit dated 13 September 2017, the wife has waived legal professional privilege in respect to communications with her previous legal advisors. That paragraph relevantly states:
The wife informs me that she does not recall the issue of the possible joinder of [Y] Pty Ltd as Trustee for the [AA] Family Trust being contemplated or discussed between her and her former solicitors.
The second issue of controversy arises from contentions contained in paragraphs 11 and 12 of the wife’s written submissions which are as follows:
11. Whilst it is fully appreciated that the Court needs to balance its consideration of this matter having regard to due and proper administration of justice, clearly the amount of material identified by the Wife’s former solicitors (being the bundle of documents at Exhibit DSC -3 to the affidavit of [Mr BB] Sworn 13 September 2017), represent substantially less than the material that the wife’s current solicitors have been able to collate since they first obtained access to be e-documents late on the evening of Friday, 25 August 2017.
12. This is not a revisit of material nor a review of material that the former solicitors for the Wife have had for an extended period of time. It is clear that regimes were in place in order to restrict the access that the wife and her former solicitors had to such material. It can be inferred from the limited amount of material identified by the Wife’s former solicitors as being proposed to be tendered at the hearing previously set down to commence in June 2017 compared to what has since been uncovered in a relatively short period of time from a review of the non-quarantined e-documents, that this was the case.
It was accepted that the contentions set out in paragraphs 11 and 12 of the wife’s written submissions were made in the context of the wife presenting reasons as to why she has not earlier sought to amend her application to seek orders for the Z disposition to be set aside.
The third issue of controversy relates to the question of compliance with the order, which, as noted, is order 11(d) of the orders made on 31 July 2017, relevantly provides:
The wife is to forthwith cause her legal representatives to make enquiries with Deloitte:
….
d. to obtain a hard drive containing all and only those documents quarantined by Deloitte and provide same to the husband by no later than 2 August 2017, and by no later than 23 August 2017 the husband to provide to the wife’s legal representatives an electronic copy of all of those documents to which he does not claim legal professional privilege together with a list of those documents to which he does claim legal professional privilege identified by the title to that document and the relevant date.
The controversy in respect to the order concerns the obligation on the husband to provide an electronic copy of those documents to which he does not claim privilege, together with a list of those documents to which he does claim privilege. The husband refers to evidence of Mr FF to assert that the cost of complying with the order is prohibitive.[2] In those circumstances, the husband submits that he should be relieved of the obligation to comply with the order or relieved of the obligation until such time as the wife meets the cost of undertaking the required task.
[2] Affidavit of Mr FF filed 15 September 2017.
Consideration of issues
Whether the wife waived privilege as a result of the contents of paragraph 38(b) of Mr BB’s affidavit
The husband argues that, as a consequence of the content of paragraph 38(b) of Mr BB’s affidavit dated 13 September 2017, the wife has impliedly waived her entitlement to legal professional privilege in respect to the contents of the files of her previous solicitors.
The wife argues that she has not waived privilege because:
·the statement was by her solicitor and not the wife personally;
·the wife does not seek to read paragraph 38(b) of her solicitor’s affidavit; and
·the content of the paragraph was not, in itself, sufficient to result in an implied waiver of privilege.
The wife also contends that if the Court finds that there has been an implied waiver of privilege on the part of the wife, it would result in the husband being entitled to inspect only those documents held on the files of the wife’s previous solicitors that specifically relate to “the possible joinder of Y Pty Ltd as Trustee for the AA Family Trust”.[3]
[3] Transcript of proceedings dated 19 September 2017 at page 15.
The husband argues, in reply, that the wife is bound by her solicitors’ statement who is acting as her agent. The husband argues that, in circumstances where the wife has expressed that she has not received advice, it is necessary for the husband to have access to the entirety of the files of her previous solicitors at least in relation to the property proceedings.
The husband argued that access to the previous solicitors’ files should not be restricted to the possible joinder of “Y Pty Ltd as Trustee for the AA Family Trust”. In order to check the veracity of the statement made on behalf of the wife, it was submitted that it is necessary to ascertain what advice the wife received in respect to the property proceedings generally.
The parties acknowledged that, in this matter, the question as to whether there has been a waiver of privilege must be determined solely with reference to the common law and not section 122 of the Evidence Act1995(Cth).[4]
[4]Mann v Carnell [1999] HCA 66; 201 CLR 1; 168 ALR 86; 74 ALJR 378 at [41].
The Rationale for Legal Professional Privilege
In Grant v Downs [1976] HCA 63 at paragraph 19; (1976) 135 CLR 674 at 685, the High Court said:
The rationale of this head of privilege, according to traditional doctrine, is that it promotes the public interest because it assists and enhances the administration of justice by facilitating the representation of clients by legal advisers, the law being a complex and complicated discipline. This it does by keeping secret their communications, thereby inducing the client to retain the solicitor and seek his advice, and encouraging the client to make a full and frank disclosure of the relevant circumstances to the solicitor. The existence of the privilege reflects, to the extent to which it is accorded, the paramountcy of this public interest over a more general public interest, that which requires that in the interests of a fair trial litigation should be conducted on the footing that all relevant documentary evidence is available. As a head of privilege legal professional privilege is so firmly entrenched in the law that it is not to be exorcised by judicial decision…
Whether there has been an implied waiver of privilege
In this case, it was accepted that there has been no intentional waiver of privilege. The question to be determined is whether there has been an implied waiver of privilege.
The contention by counsel for the wife that privilege has not been lost by the wife as the disclosure was made by her lawyer is, with respect, incorrect. This is because “the disclosure was made with the implied or ostensible authority of the client on whose behalf the privilege was being claimed”.[5]
[5] Commissioner of Taxation v Coombes (25 June 1999)[1999] FCA 842; 92 FCR 240; 164 ALR 131 (Sundberg, Merkel and Kenny JJ) at [37] referring to Great Atlantic Insurance Co v Home Insurance Co [1981] 2 All ER 485 at 492-494 per Templeman LJ and Causton v Mann Egerton (Johnsons) Ltd [1974] 1 All ER 453 at 457.
In Macquarie Bank Limited v Arup Pty Limited [2016] FCAFC 117 the Full Court of the Federal Court of Australia said:
24. … the guiding principle to be applied in determining whether waiver of legal professional privilege occurs at common law is that stated in Mann v Carnell (1999) 201 CLR 1 (‘Mann v Carnell’), wherein the majority held at [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.
25. The governing principle that underpins implied waiver has undergone a process of judicial evolution. In Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 481, 487, 492, 497, the High Court held that implied waiver occurs when, by reason of some conduct on the privilege holder’s part, it becomes unfair to maintain the privilege. However, ‘fairness’ was subsequently abandoned as the touchstone of implied waiver by the High Court in Mann v Carnell.
26. The Full Court of the Federal Court applied Mann v Carnell in Commissioner of Taxation v Rio Tinto Ltd (2006) 151 FCR 341. In that case, the Court held at [52]:
...where issue or implied waiver is made out, the privilege holder has expressly or impliedly made an assertion about the contents of an otherwise privileged communication for the purpose of mounting a case or substantiating a defence. Where the privilege holder has put the contents of the otherwise privileged communication in issue, such an act can be regarded as inconsistent with the confidentially that would otherwise pertain to the communication.
27. As referred to by the primary judge, the Court further observed at [65]:
As the previous examination of the authorities shows, the question is not whether the Commissioner has put his state of mind in issue but whether he has directly or indirectly put the contents of the otherwise privileged communications in issue in the litigation, either in making a claim or by way of defence. Put another way, to adapt Allsop J’s language in DSE, has the Commissioner (being the privilege holder) made an assertion as part of his or her case in the litigation that lays open the privileged documents to scrutiny, with the consequence that an inconsistency arises between the making of the assertion and the maintenance of the privilege?
28. The correct approach was succinctly described by Yates J in Ferella & Anor v Official Trustee in Bankruptcy (2010) 188 FCR 68 at [65] in the following terms:
...However the question is not simply whether the holder of the privilege has put that person’s state of mind in issue but whether that person has directly or indirectly put the contents of the otherwise privileged communication in issue: see [Rio Tinto] at [65]. Indeed, even the fact that the holder of the privilege makes clear that the advice was relevant or contributed to a particular course of conduct would not be sufficient to waive the privilege unless, possibly, the contents of the legal advice (and not merely the fact of the advice) are specifically put in issue by relying on the contents of the advice to vindicate a claimed state of mind: [Rio Tinto] at [67].
29. In determining whether there has been an implied waiver of privilege, the Court’s focus will be on whether there has been conduct that is inconsistent with the maintenance of confidentiality in the communication over which privilege is asserted. An assessment of whether there has been an implied waiver will be informed by considerations of forensic unfairness.
The need to avoid another party and/or the Court being misled by partial disclosure of a privileged communication
In Attorney-General (NT) v Maurice (1986) 161 CLR at paragraph 7 (“Maurice”), Gibbs CJ said:
…where there is no intentional waiver the question whether a waiver should be implied depends on whether it would be unfair or misleading to allow a party to refer to or use material and yet assert that that material, or material associated with it, is privileged from production. (emphasis added).
Also, in Maurice, Mason and Brennan JJ said:
…A litigant can of course waive his privilege directly through intentionally disclosing protected material. He can also lose that protection through a waiver by implication. An implied waiver occurs when, by reason of some conduct on the privilege holder's part, it becomes unfair to maintain the privilege. The holder of the privilege should not be able to abuse it by using it to create an inaccurate perception of the protected communication. Professor Wigmore explains:
"(W)hen his conduct touches a certain point of disclosure, fairness requires that his privilege shall cease whether he intended that result or not. He cannot be allowed, after disclosing as much as he pleases, to withhold the remainder."
(Wigmore, Evidence in Trials at Common Law (1961) vol.8, 2327, at p.636). In order to ensure that the opposing litigant is not misled by an inaccurate perception of the disclosed communication, fairness will usually require that waiver as to one part of a protected communication should result in waiver as to the rest of the communication on that subject matter: see Great Atlantic Insurance v. Home Insurance (1981) 1 WLR 529; (1981) 2 All ER 485. (emphasis added).
In this matter, paragraph 38(b) of Mr BB’s affidavit sworn on 13 September 2017 has laid open the confidential communication between the wife and her former solicitors. The relevant question is whether it would be unfair to permit the wife’s Amended Application in a Case to proceed without disclosure of relevant communications between herself and her solicitors.
The statement that the wife “does not recall the issue of the possible joinder of [Y] Pty Ltd as Trustee for the [AA] Family Trust being contemplated or discussed between her and her former solicitors” is made in the context of Mr BB seeking a forensic advantage for the wife in explaining the wife’s delay prior to him “being retained to act on behalf of the wife”.[6] The husband is, in my opinion, entitled to test the veracity of that explanation.
[6] Affidavit of Mr BB filed 13 September 2017 at [38].
Further, the reference to the absence of communication regarding the possible joinder of Y Pty Ltd as Trustee for the AA Family Trust begs the question as to whether the wife discussed and/or received other pertinent advice from her previous solicitors. For instance, it begs the question as to whether the wife discussed and/or received advice concerning the joinder of Mr Aaron to the proceedings in the context where she seeks leave to now do so. It also begs the question as to whether the wife discussed and/or received advice regarding impugning the “Z Disposition”.
To permit the wife’s statement to remain, without effective challenge, could potentially result in the husband and the Court being misled as to whether the wife discussed and/or received advice about these other matters which are equally relevant to the order she seeks in her Amended Application in a Case.
Did the filing and service of Mr BB’s affidavit waive privilege even though the relevant paragraph is not read?
In earlier authorities it was held that the mere act of serving an affidavit for the purpose of litigation did not result in a waiver of privilege. According to those authorities, privilege was not lost unless and until the content of the affidavit was read in evidence.[7]
[7] Nilsen Industrial Electronics Pty Ltd v National Semiconductor Corporation (1994) 48 FCR 337 and Complete Technology Pty Limited v Toshiba (Australia) Pty Ltd (1994) 53 FCR 125.
However, more recent authority has held that the filing and service of an affidavit or outline of evidence amounts to an implied waiver of privilege.[8] This is because once an affidavit is served, the party upon whom the affidavit is served is “at liberty to use the … affidavit and its contents as they [see] fit for the proper purposes of that litigation”.[9] The act of filing and serving the affidavit is therefore “inconsistent with the maintenance of the confidentiality of the communications recorded”.[10]
[8] Liberty Funding Pty Ltd v Phoenix Capital Limited (2005) 218 ALR 283 at [20] – [23]; Cadbury Schweppes Pty Ltd v Amcor Limited (2008) 246 ALR 137 at [15]-[19] per Gordon J; ACCC v Construction, Forestry, Mining and Energy Union [2008] FCA 678 at [122]-[130] per Finn J; Australian Medi-Care Co Ltd v Hamilton Pharmaceutical Pty Ltd (No. 3) [2008] FCA 976 at [15] per Lander J.
[9] Liberty Funding Pty Ltd v Phoenix Capital Limited [2005] FCAFC 3 at [20].
[10] Ibid.
Accordingly, the fact that the wife has given notice that she does not intend to read paragraph 38(b) of Mr BB’s affidavit is irrelevant. Privilege has been lost as a result of filing and serving the affidavit. This is because that act was inconsistent with the disclosure of the communication between the wife and her previous solicitors regarding the subject matter set out in paragraph 38(b) of Mr BB’s affidavit.
With respect to a submission from counsel for the wife, it does not matter that section 121 of the Family Law Act1975 (Cth) (“the Act”) precludes public disclosure of information produced in the context of family law proceedings. As noted, the privilege is waived because the filing and serving of the affidavit was inconsistent with the confidentiality of the information. Further, despite the fact that the wife does not intend to read paragraph 38(b), the information is now available to be used for the purpose of the litigation.
Scope of the Waiver
In Goldberg v Ng Hango Holdings Pty Ltd [1995] HCA 39 at paragraph 18 Deane, Dawson and Gaudron JJ said that an imputed waiver does not necessarily completely destroy the privilege but “like an express waiver, it can be limited so that it applies only in relation to particular persons, materials or purposes”.
I have earlier referred to the joint judgment of Mason and Brennan JJ in Maurice, where their Honours stated “that waiver as to one part of a protected communication should result in waiver as to the rest of the communication on that subject matter” (emphasis added).
In Australian Competition and Consumer Commission v Prysmian Cavi E Sistemi Energia S.R.L. (No 10) [2015] FCA 763 (“Prysmian”), Besanko J applied the statement of Mustill J in Nea Karteria Maritime Co Ltd v Atlantic & Great Lakes Steamship Corporation [No. 2],[11] that “voluntary disclosure of the content of a privileged attorney communication constitutes waiver of the privilege with respect to all other such communications upon the same subject-matter” (emphasis added).
[11][1981] Com. L.R 138.
In Prysmian, Besanko J noted that, in determining the subject matter of the communication, useful guidance is provided by Mann J in Fulham Leisure v Nicholson Graham & Jones [2006] All ER 599 (“Fulham Leisure”), where his Honour said (at 604, [11]):
… it seems to me that the relevant process should be as follows:
(i)One should first identify the ‘transaction’ in respect of which the disclosure has been made.
(ii)That transaction may be identifiable simply from the nature of the disclosure made – for example, advice given by counsel on a single occasion.
(iii)However, it may be apparent from that material, or from other available material, that the transaction is wider than that which is immediately apparent. If it does, then the whole of the wider transaction must be disclosed.
(iv)When that has been done, further disclosure will be necessary if that is necessary in order to avoid unfairness or misunderstanding of what has been disclosed …
The wife argued that, if waiver of privilege has occurred in this matter, it has only occurred in respect to the specific statement set out in paragraph 38(b) of Mr BB’s affidavit. That is, only in respect to advice provided by the wife’s previous solicitors concerning possible joinder of “Y Pty Ltd as Trustee for the AA Family Trust” to the proceedings. I do not agree. As noted, the affidavit of Mr BB has been filed and served to support his client’s Amended Application in a Case seeking leave to challenge the Z Disposition and also to join Mr Aaron and Y Pty Ltd to the proceedings. That context is clearly relevant in determining the subject matter of the communication.
Senior counsel for the husband relied upon the decision of Le Poer Trench J in Howarth and Norman[12] where his Honour postulated the issue that he had to determine in the following terms:
The question which therefore falls for determination by me is whether having regard to those considerations of fairness the wife should be permitted to rely on confidentiality and therefore privilege, in the face of the case which she mounts in this Court.
[12] [2003] FamCA 613 at [24].
His Honour found that the wife’s case was “fundamentally dependent upon her establishing that she did not at any time between the making of the property orders and the filing of her application (or at least until she engaged her current lawyers and received their advice to proceed in the Court) receive any relevant advice”.[13]
[13] Ibid.
On the facts of that case, his Honour held:
Intertwined in the wife’s case are other aspects of “lack of appropriate legal advice” and allegations of incompetence or inaction on the part of the lawyers engaged by her which would also invoke the question of “perceived fairness” in permitting the wife to maintain her case and at the same time continue her legal professional privilege which may prevent the husband and consequently the Court access to relevant facts.
It is my conclusion that the wife has waived her legal professional privilege in respect of the files to which privilege is claimed. The wife’s case is so multifaceted that it would be unfair for me to be the arbitrator of what should or should not be made available for inspection amongst the documents so produced.[14]
[14] Ibid at [25-26].
Senior counsel for the husband argued that, in order to challenge the wife’s assertion made through her solicitor at paragraph 38(b) of Mr BB’s affidavit, it is similarly the case that the husband is required to prove the absence of a negative. That is, it was submitted, it is necessary for the husband to prove that the wife did actually receive advice concerning the subject matter of paragraph 38(b) and to do that required examining the files of the wife’s previous solicitors to ascertain what advice she actually did receive.
It was further submitted, on behalf of the husband, that the wife’s case that she did not receive such advice to join Y Pty Ltd implicitly challenges the competence of the advice that she has received from the previous solicitors and, for that additional reason, the husband should be given access to the entirety of the files of the wife’s previous solicitors.
It was accepted by the husband, however, that whatever the outcome, the husband was not entitled to inspect those aspects of the files of the wife’s previous solicitors that related to parenting matters.
As will subsequently be discussed, I do not agree with the husband that the reasoning of Le Poer Trench J in Howarth and Norman [2003] FamCA 613 is applicable in this case.
The interests of justice entitle the husband to challenge the wife’s assertion, communicated through her solicitor Mr BB, regarding the absence of advice from her previous solicitors. To effectively undertake that task, the husband is entitled to access the wife’s previous solicitors’ files to ascertain what advice was provided to the wife regarding the subject matter of paragraph 38(b) of Mr BB’s affidavit.
In my view, that subject matter is to be determined by the context in which Mr BB’s affidavit has been prepared. It has been prepared to justify the delay on the part of the wife in seeking orders to set aside the Z Disposition and to join, to these proceedings, the entity to the transaction, and the person who, with the husband, was responsible for the transaction. Accordingly, the wife seeks to join Y Pty Ltd and Mr Aaron.
Viewed in that context, the subject matter of the privilege and the matters the wife is required to disclose are all communications between herself and her previous solicitors regarding:
i.The transfer by W Pty Ltd (ACN …) as Trustee for the X Family Trust of all its interest in Z Pty Ltd ACN … to Y Pty Ltd ACN … as Trustee for the AA Family Trust pursuant to Sale and Purchase Agreement dated 18 September 2013, completed on or about 28 February 2014.
ii.Transactions entered into between the husband and Mr Aaron in the period subsequent to 17 September 2014.
iii.Transactions entered into between any entity owned or controlled by the husband and any entity owned or controlled by Mr Aaron in the period subsequent to 17 September 2014.
iv.Payments received by the husband, in the period subsequent to 17 September 2014, from Mr Aaron and/or any entity owned or controlled by Mr Aaron.
v.Payments received by any entity owned or controlled by the husband, in the period subsequent to 17 September 2014, from Mr Aaron and/or any entity owned or controlled by Mr Aaron.
I do not accept that it is a necessary inference that the assertion contained in paragraph 38(b) of Mr BB’s affidavit is that the wife challenges the competency of advice that she received from her previous solicitors. The wife’s case appears to be based on an assertion that her previous solicitors lacked necessary information to provide her with appropriate advice rather than that they were incompetent.
In Dalton & Dalton [2017] FamCAFC 78 (Ainslie-Wallace, Ryan and Murphy JJ) the Full Court said at paragraph 20:
Invariably, the question of implied waiver requires a fact based enquiry. It is unlikely that the facts as found in other cases will be of assistance in a different case.
The facts of this case can, accordingly, be distinguished from Howarth and Norman.[15] There is no justification for requiring the wife to disclose the totality of communications between herself and her previous solicitors.
Has the wife waived privilege as a result of a contention, contained in her written submissions, that documents that are now available to her current solicitors were not available to her previous solicitors
[15] [2003] FamCA 613.
The husband contends that, read as a whole, paragraph 12 of the wife’s written submissions, which has been set out above, is a contention that there were documents revealed to the wife that she only become aware of after 13 June 2017. That date is relevant because it was the date that the documents set out in Exhibit DSC-3 were served upon the solicitors for the husband by the wife’s former solicitors. As a consequence, it was submitted that the wife has waived privilege in respect to both her former solicitors’ file and her current solicitors’ file.
InStandard Chartered Bank of Australia Ltd v Antico (1993) 36 NSWLR 87, 94, Hodgson J said at paragraphs 94 to 95:
If a party, by pleadings or evidence, expressly or impliedly makes an assertion about the content of confidential communications between that party and a legal adviser, then fairness to the other party may mean that this assertion has to be taken as a waiver of any privilege attaching to the communication.
In my view, privilege attached to a communication may also be lost as a result of referring to the communication, or communications, in written submissions.
In that context, in their joint judgment in Harold John Goldberg and Yona Goldberg v Bernard Ng, Hango Holdings Pty Limited And Cheryl Ng (1995) 185 CLR 83, Deane, Dawson And Gaudron JJ stated:
The circumstances in which a waiver of legal professional privilege will be imputed by operation of law cannot be precisely defined in advance. The most that can be done is to identify a number of general propositions. Necessarily, the basis of such an imputed waiver will be some act or omission of the persons entitled to the benefit of the privilege. Ordinarily, that act or omission will involve or relate to a limited actual or purported disclosure of the contents of the privileged material. When some such act or omission of the person entitled to the benefit of the privilege gives rise to a question of imputed waiver, the governing consideration is whether "fairness requires that his privilege shall cease whether he intended that result or not"(emphasis added).[16]
[16] Citing Wigmore on Evidence (McNaughton Rev 1961), vol 8, par 2327, quoted with approval by Gibbs CJ and by Mason and Brennan JJ in Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 481, 488.
One such example where privilege may be lost is in referring to advice or lack of advice as justifying why an election was or was not made. In Thomason v Council of the Municipality of Campbelltown[17] (“Thomason”) an issue arose as to whether a widow was precluded from bringing a claim under the Compensation to Relatives Act1897 (NSW) as a result of having made a prior claim under the Workers' Compensation Act1926 (NSW). An issue in the proceedings was whether the widow had therefore made an informed election to commence the workers compensation proceedings. Accordingly, the subject matter of the advice provided to the widow was an issue in the proceedings. Jordan CJ, with which Halse Rogers and Bavin JJ concurred, held:
This being so, it was necessary under the second plea for the defendant to prove, if it could, what knowledge the plaintiff had as to her legal rights; and this was knowledge which she was not likely to possess unless she derived it from legal adviser. Hence, in effect, one of the issues in the case was what advice if any the plaintiff had received from her legal advisers as to her alternative legal rights. In these circumstances, since the fact and nature of the advice is an issue in the case, I am of opinion that privilege cannot be raised to prevent the proof of the advice.
[17] (1939) 39 SR (NSW) 347.
In DSE (Holdings) Pty Ltd v Intertan Inc and Anor,[18] Allsop J, as he then was, discussed several authorities in which Thomason has been considered. His Honour was of the view that the statement of principle adumbrated by Jordan CJ was too broad, insofar as it suggested that a party to proceedings could force the other party to waive privilege simply by making the nature of the privileged advice an issue in the proceedings. In that respect, Allsop J adopted, with approval, the following statement by Wheeler J in Commonwealth v Tamwood Holdings Pty Ltd:[19]
…it is the conduct of the party who possesses the privilege which is capable of waiving it. It is not apparently open to another party to litigation to force waiver of a party's legal professional privilege by making assertions about, or seeking to put in issue, that party's state of mind.
[18][2003] FCA 384; (2003) 127 FCR 499.
[19][2002] WASC 107 at [10].
In terms of those cases where a party makes an assertion that they have or have not adopted a particular course of action because of the advice they received or did not receive, Allsop J summarised the position as follows:[20]
... It is sufficient to understand... that... (if) the party entitled to the privilege makes an assertion (express or implied) or brings a case which is either about the contents of the confidential information or which necessarily lays open the confidential communication to scrutiny and, by such conduct, an inconsistency arises between the act and the maintenance of the confidence, informed party by the forensic unfairness of allowing the claim to proceed without disclosure of the communication.
[20] DSE (Holdings) Pty Ltd v Intertan Inc and Anor. [2003] FCA 384; (2003) 127 FCR 499 at [58].
That is what has happened in this case. There are two assertions of significance in paragraph 12 of the wife’s written submissions which have been set out above.
The first assertion is that the wife’s previous solicitors had less information available to them than the wife’s current solicitors. This, it is contended, is evidenced by the amount of material identified by the Wife’s former solicitors (being the bundle of documents at Exhibit DSC-3 to the affidavit of Mr BB Sworn 13 September 2017). It is further contended that the previously available material “represents substantially less than the material that the wife’s current solicitors have been able to collate since they first obtained access to be e-documents late on the evening of Friday, 25 August 2017”.[21]
[21] Exhibit W1.
The second assertion is that the absence of information available to wife’s former solicitors was due to the fact that “regimes were in place in order to restrict the access that the wife and her former solicitors had to such material”.[22]
[22] Transcript of proceedings dated 19 September 2017 at page 35.
By making the first assertion, the wife has put in issue the knowledge that the wife’s previous solicitors had concerning the documents that are now in the possession of the wife’s current solicitors. To test the veracity of that assertion necessarily requires inquiry as to what documentation was provided by the wife to her previous solicitors.
The second assertion puts in issue the question as to whether any conduct by the wife’s previous solicitors, namely the putting in place of “regimes” resulted in those previous solicitors having less access to the relevant documents than the wife’s current solicitors have. To test the veracity of that assertion necessarily requires inquiry as to what “regimes were in place”, the duration of those regimes, and whether the wife and/or her solicitors had the capacity to vary those regimes such that they had access to the relevant documentation at an earlier time.
Accordingly, as a result of the contentions made in paragraph 12 of the wife’s written submissions, the wife, being the person claiming the privilege, has put in issue the extent of the knowledge that she and her previous solicitors had of the documents now in the possession of the wife’s current solicitors. Specifically, the issue is whether the knowledge that her previous solicitors had was inferior to that of her current legal advisors and if so, why that was the case.
The wife has therefore waived privilege in respect to:
1.All communication and documentation evidencing the extent to which her previous solicitors had possession and/or control of the documents now in the possession of the wife’s current solicitors which have been described in these proceedings as the E-documents; and
2.All communication and documentation evidencing the extent to which her current solicitors have possession and/or control of the E-documents and the dates when that occurred.
Compliance with order 11(d) of the orders made on 31 July 2017
As noted above, the husband seeks relief from his obligation to comply with order 11(d) of the orders which were made by consent on 31 July 2017.
In Woodgate (Trustee) v Northop Hall Pty Ltd [2016] FCA 370, Rares J considered an application to vary consent orders. His Honour held that the fact that the consent orders were arrived at as a result of a compromise between the parties was significant. His Honour said at paragraph 31:
The court retains control of any interlocutory order that it makes. Ordinarily, a further order will be appropriate when, for example, new facts come existence or are discovered which render the enforcement of an interlocutory order unjust: Adam P. Brown Male Fashion Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170 at 178 per Gibbs CJ, Aickin, Wilson and Brennan JJ; see too r 39.05(c).
In determining whether it would be unjust for the order to be enforced against the husband, it is necessary to consider the background to that order being made. The relevant background is that the documents referred to in the order were provided to the wife’s previous solicitors by the wife. Those documents were all in electronic format. The precise source of the documents is uncertain, however, it appears that some of the documents were located by the wife on computer hard drives to which she had access. It appears that other documents had been provided to the wife in electronic format by an undisclosed third-party. The precise timing as to when the documents were obtained by the wife is uncertain as is the date that they were provided to the wife’s previous solicitors.
Again, while the precise details of the arrangement remain unclear, it appears that the wife’s previous solicitors arranged for Deloittes to review the documents with a view to separating those that they regarded as being potentially the subject of legal professional privilege.
In Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited,[23] the High Court considered the appropriate professional responsibilities on solicitors who received privileged documents that were provided in error by the party claiming privilege. The High Court was clear as to the appropriate course of action that should be taken by solicitors receiving documents in those circumstances. At paragraphs 65 to 67 the High Court stated:
The position of solicitors who are in receipt of privileged documents has another dimension. Rule 31 of the Australian Solicitors' Conduct Rules, which were adopted by the Law Council of Australia[24], deals with the duty of a solicitor to return material, which is known or reasonably suspected to be confidential, where a solicitor is aware that its disclosure was inadvertent. It involves notifying the other solicitor of the disclosures and returning that material. The rule has been adopted in Queensland[25] and South Australia[26] and the Law Society of New South Wales presently proposes to adopt it.[27]
Such a rule should not be necessary. In the not too distant past it was understood that acting in this way obviates unnecessary and costly interlocutory applications. It permits a prompt return to the status quo and thereby avoids complications which may arise in the making of orders for the rectification of the mistake and the return of documents.
This approach is important in a number of respects. One effect is that it promotes conduct which will assist the court to facilitate the overriding purposes of the CPA. It is an example of professional, ethical obligations of legal practitioners supporting the objectives of the proper administration of justice.
[23] [2013] HCA 46 (French CJ, Kiefel, Bell, Gageler and Keane JJ).
[24] Council of the Law Society New South Wales, Proposed New South Wales Professional Conduct and Practice Rules 2013 (Solicitors' of Rules) at 1.
[25] Legal Profession (Australian Solicitors Conduct Rules) Notice 2012 (Q).
[26]Australian Solicitors' Conduct Rules 2011 (SA).
[27] Council of the Law Society of New South Wales, Proposed New South Wales Professional Conduct and Practice Rules 2013 (Solicitors' Rules).
Regrettably, that course of action did not occur in the present case. It should be noted, however, that the wife’s current solicitors have agreed to those documents which have been quarantined as potentially being the subject of legal professional privilege being held in the Registry of the Family Court of Australia.
A further matter of relevance is that on 19 September 2017 the following orders were made:
…
5. Within 28 days of the date of these orders the parties provide updated disclosure of their respective financial circumstances to the other including, insofar as it may be relevant, disclosure in respect to those matters as set out in rule 13.04 of the Family Law Rules 2004 (Cth).
6. Each party is to file and serve an undertaking as to disclosure in accordance with Rule 13.15 of the Family Law Rules 2004 (Cth) by no later than 28 days prior to the first day of the final hearing.
The Family Law Rules 2004 (Cth) (“the Rules”) that are relevant to the consideration of this matter are as follows:
13.01General duty of disclosure
(1) Subject to subrule (3), each party to a case has a duty to the court and to each other party to give full and frank disclosure of all information relevant to the case, in a timely manner.
Note: Failure to comply with the duty may result in the court excluding evidence that is not disclosed or imposing a consequence, including punishment for contempt of court. This Chapter sets out a number of ways that a party is either required, or can be called upon, to discharge the party’s duty of disclosure, including:
(a) disclosure of financial circumstances (see Division 13.1.2);
(b) disclosure and production of documents (see Division 13.2.1); and
(c) disclosure by answering specific questions in certain circumstances (see Part 13.3).
(2) The duty of disclosure starts with the pre-action procedure for a case and continues until the case is finalised.
Note:The duty of disclosure applies to a case guardian for a child and a person with a disability (see subrule 6.13(2)).
(3) This rule does not apply to a respondent in an application alleging contravention or contempt.
…
13.04Full and frank disclosure
(1) A party to a financial case must make full and frank disclosure of the party’s financial circumstances, including:
(a) the party’s earnings, including income that is paid or assigned to another party, person or legal entity;
(b) any vested or contingent interest in property;
(c) any vested or contingent interest in property owned by a legal entity that is fully or partially owned or controlled by a party;
(d) any income earned by a legal entity fully or partially owned or controlled by a party, including income that is paid or assigned to any other party, person or legal entity;
(e) the party’s other financial resources;
(f) any trust:
(i) of which the party is the appointor or trustee;
(ii) of which the party, the party’s child, spouse or de facto spouse is an eligible beneficiary as to capital or income;
(iii) of which a corporation is an eligible beneficiary as to capital or income if the party, or the party’s child, spouse or de facto spouse is a shareholder or director of the corporation;
(iv)over which the party has any direct or indirect power or control;
(v) of which the party has the direct or indirect power to remove or appoint a trustee;
(vi)of which the party has the power (whether subject to the concurrence of another person or not) to amend the terms;
(vii) of which the party has the power to disapprove a proposed amendment of the terms or the appointment or removal of a trustee; or
(viii) over which a corporation has a power mentioned in any of subparagraphs (iv) to (vii), if the party, the party’s child, spouse or de facto spouse is a director or shareholder of the corporation;
(g) any disposal of property (whether by sale, transfer, assignment or gift) made by the party, a legal entity mentioned in paragraph (c), a corporation or a trust mentioned in paragraph (f) that may affect, defeat or deplete a claim:
(i)in the 12 months immediately before the separation of the parties; or
(ii)since the final separation of the parties; and
(h)liabilities and contingent liabilities.
(2) Paragraph (1)(g) does not apply to a disposal of property made with the consent or knowledge of the other party or in the ordinary course of business.
(3) In this rule:
legal entity means a corporation (other than a public company), trust, partnership, joint venture business or other commercial activity.
Note: The requirements in this rule are in addition to the requirements in rules 12.02 and 12.05 to exchange certain documents before a conference in a property case.
…
13.07Duty of disclosure—documents
The duty of disclosure applies to each document that:
(a)is or has been in the possession, or under the control, of the party disclosing the document; and
(b)is relevant to an issue in the case.
Note 1:For documents that parties must produce to the court:
(a) on the first court date for a Maintenance Application, see rule 4.15;
(b) on the first court date for a child support application or appeal, see rule 4.26(2);
(c) at a conference in a property case, see Part 12.2; and
(d) at a trial, see Chapters 15 and 16.
Note 2:Rule 13.15 provides that a party must file a written notice about the party’s duty of disclosure.
Note 3:Rule 15.76 provides that a party may give another party a notice to produce a specified document at a hearing or trial.
…
13.12Documents that need not be produced
Subject to rule 15.55, a party must disclose, but need not produce to the party requesting it:
(a)a document for which there is a claim for privilege from disclosure; or
(b)a document a copy of which is already disclosed, if the copy contains no change, obliteration or other mark or feature that is likely to affect the outcome of the case.
Note:Rule 13.13 sets out the requirements for challenging a claim of privilege from disclosure.
13.13Objection to production
(1) This rule applies if:
(a)a party claims:
(i) privilege from production of a document; or
(ii) that the party is unable to produce a document; and
(b)another party, by written notice, challenges the claim.
(2) The party making the claim must, within 7 days after the other party challenges the claim, file an affidavit setting out details of the claim.
Note:If there is a dispute about disclosure, an application may be made to the court (see rules 13.18 and 13.22).
13.14Consequence of non‑disclosure
If a party does not disclose a document as required under these Rules:
(a)the party:
(i)must not offer the document, or present evidence of its contents, at a hearing or trial without the other party’s consent or the court’s permission;
(ii)may be guilty of contempt for not disclosing the document; and
(b)may be ordered to pay costs; and
(c)the court may stay or dismiss all or part of the party’s case.
Note 1:Under rule 15.76, a party who discloses a document under this Part must produce the document at the trial if a notice to produce has been given.
Note 2:Section 112AP of the Act sets out the court’s powers in relation to contempt of court.
13.15Undertaking by party
(1)A party (except an independent children’s lawyer) must file a written notice:
(a)stating that the party:
(i) has read Parts 13.1 and 13.2 of these Rules; and
(ii)is aware of the party’s duty to the court and each other party (including any independent children’s lawyer) to give full and frank disclosure of all information relevant to the issues in the case, in a timely manner
(b)undertaking to the court that, to the best of the party’s knowledge and ability, the party has complied with, and will continue to comply with, the duty of disclosure; and
(c)acknowledging that a breach of the undertaking may be contempt of court.
(2)A party commits an offence if the party makes a statement or signs an undertaking the party knows, or should reasonably have known, is false or misleading in a material particular.
Penalty:50 penalty units.
Note:Subrule (2) is in addition to the court’s powers under section 112AP of the Act relating to contempt and the court’s power to make an order for costs.
(3)If the court makes an order against a party under section 112AP of the Act in respect of a false or misleading statement mentioned in subrule (2), the party must not be charged with an offence against subrule (2) in respect of that statement.
(4)A notice under subrule (1) must comply with subrule 24.01(1) and be as follows [text set out in rule].
The rules to which I have referred make it clear that the parties each have an obligation to disclose to the other party all information that is in their possession or under their control and that is relevant to the case.
The obligation to produce does not extend to documents which are the subject of a claim for legal professional privilege. However, the party claiming such privilege, must, pursuant to rule 13.12, nonetheless disclose those documents which are the subject of the claim.
Accordingly, insofar as an order for updated disclosure was made, the husband is under an obligation to provide to the wife all information in his possession or control that is relevant to the proceedings. While that obligation does not extend to producing documents that are the subject of a claim for legal professional privilege, those documents must nonetheless be disclosed.
Accordingly, the only purpose that can be served by the obligation imposed by the order is to require the husband to provide to the wife those documents to which he does not claim privilege and which are not otherwise covered by the obligation of disclosure pursuant to Part 13 of the Rules. As noted, the Rules require the husband to provide to the wife all information in his possession or control that is relevant to the proceedings, with the exception of those documents which are the subject of a claim for legal professional privilege. It is, therefore, necessarily the case that the only purpose that can be served by the order is to require the husband to provide to the wife documents which are not relevant to the proceedings.
Documents that are not relevant to a proceeding are, for good reason, not ordinarily discoverable.[28]
[28]Macquarie Bank Limited v Arup Pty Limited [2016] FCAFC 117.
There is, in those circumstances, no justification for requiring the husband to comply with the order. Specifically, in the circumstances of this case, where the privileged documents should have been promptly returned to the solicitors for the husband, it would be unjust to require the husband to incur additional expense in providing, to the wife, documents which are not relevant to the proceedings and which he is not otherwise required to provide pursuant to Part 13 of the Rules and which are not discoverable in accordance with common law principles.
For all these reasons I make the orders as set out at the commencement of these Reasons for Judgment.
I certify that the preceding eighty-five (85) paragraphs are a true copy of the reasons for judgment of the Honourable Justice McClelland delivered on 4 October 2017.
Associate:
Date: 4 October 2017
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