Southern Waste ResourceCo Pty Ltd v Adelaide Hills Region Waste Management Authority

[2019] SASC 190

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

SOUTHERN WASTE RESOURCECO PTY LTD v ADELAIDE HILLS REGION WASTE MANAGEMENT AUTHORITY

[2019] SASC 190

Judgment of The Honourable Justice Hinton

15 November 2019

PROCEDURE - DISCOVERY AND INTERROGATORIES - DISCOVERY AND INSPECTION OF DOCUMENTS

PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - AMENDMENT

The defendant made three applications eight days into the trial in this matter, seeking orders: that it be permitted to amend its Defence, for the production of documents over which the plaintiff had claimed legal professional privilege and for the production of further documents relating to the negotiations between the plaintiff and the owners of the site, the Harveys. The applications were resolved on 9 August 2016 without reasons; these are the reasons for the orders made on that date. 

In relation to the first application, the defendant sought to amend its Defence to include a claim that SWR were contributorily negligent and had not exercised reasonable care. The plaintiff submitted that it had not prepared to answer a claim for contributory negligence and that the amendment would cause inconvenience and delay. The defendant’s application was brought in good faith and there was an adequate explanation for the delay in making the allegation. The material facts relevant to an allegation of want of reasonable care or contributory negligence were already in issue on the pleadings. Amendment allowed.

In relation to the second application, the plaintiff claimed that each of the documents sought were prepared for the dominant purpose of obtaining legal advice and were privileged. The defendant claimed that the plaintiff had waived privilege over those documents by the way in which it had conducted its case. The plaintiff did not directly or indirectly put the content of the privileged communications in issue; privilege was not waived.

In relation to the third application, the defendant filed a notice to produce of numerous documents which were alleged by the defendant to be relevant to the issues at trial but not disclosed by the plaintiff. The notice identified 14 categories of documents. The defendant had a legitimate forensic purpose in requesting production. In the absence of said production, the plaintiff was ordered to provide an explanation of the search undertaken to obtain the documents.

Competition and Consumer Act 2010 (Cth) s 137B; Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA) s 7; Local Government Act 1999 (SA) s 43; Misrepresentations Act 1972 (SA) s 7; Supreme Court Civil Rules 2006 (SA) rr 3, 54, 117 and 215, referred to.
Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; Cement Australia Pty Ltd & Ors v Australian Competition and Consumer Commission (2010) 187 FCR 261; Channel Seven Adelaide Pty Ltd v Manock [2010] SASCFC 59; Commissioner of Taxation v Rio Tinto Ltd [2006] FCAFC 86; DSE (Holdings) Pty Ltd v Intertan Inc [2003] FCA 384; Legal Services Commission v W, JH (2012) 223 A Crim R 534; PPG Development Pty Ltd v Capitanio [2016] SASC 169; Trade Practices Commission v Arnotts Ltd (1989) 88 ALR 90, considered.

SOUTHERN WASTE RESOURCECO PTY LTD v ADELAIDE HILLS REGION WASTE MANAGEMENT AUTHORITY
[2019] SASC 190

Application

HINTON J:

Introduction

1. On 30 June 2016, eight days into the trial of this matter, I heard three applications made by the defendant, the Adelaide Hills Region Waste Management Authority (the Authority), seeking orders:

   1.   That it be permitted to amend its Defence;

   2.   For the production of documents over which the plaintiff, Southern Waste ResourceCo (SWR), claimed legal professional privilege which, in response, the Authority contended had been waived; and

   3.   For the production of documents subject of a notice to produce filed 27 June 2016, such documents relating to the negotiations between SWR and the owners of the land at Hartley leading to the execution of two deeds, the Litigation Management and Funding Deed and the Landfill Deed, on 12 August 2012.

2. I had the benefit of both oral and written submissions from the parties on each of the Authority’s applications.

3. On 9 August 2016, I made the following orders:

   1.The defendant has permission to file a third defence in the form of the Draft Third Defence provided to the court by email on 27 June 2016.

   2.Pursuant to rules 117 and 215(1)(d) of the Supreme Court Civil Rules 2006 (SA) (SCCR), the plaintiff is, by no later than close of business on 11 August 2016, to produce for inspection by the defendant the documents referred to at items 11 and 14 of the notice to produce filed by the defendant on 27 June 2016.

   3.Pursuant to rule 117 SCCR, the plaintiff is, by no later than close of business on 12 August 2016, to file and serve an affidavit sworn by its proper officer deposing as to the investigations and inquiries undertaken by the plaintiff for the purpose of locating documents referred to at items 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 12 and 13 of the notice to produce filed by the defendant on 27 June 2016.

   4.Costs of the three applications to be reserved. 

4. My reasons for making those orders follow.

   Background

5. SWR has operated a bulk waste disposal facility, or landfill, at Hartley since 2013. Prior to 2013, that landfill was operated by the Authority. The Authority is a regional subsidiary established under s 43 of the Local Government Act 1999 (SA) by four councils: the District Council of Mount Barker, the Rural City of Murray Bridge, the Adelaide Hills Council and Alexandrina Council (the constituent councils).

6. The land at Hartley upon which the landfill is located is owned by third parties. Prior to 13 February 2013 it was leased by the Authority. In 2011, the Authority sought to exercise a right of renewal under the lease so that it could continue to operate the landfill. A dispute arose. In August 2012, SWR, on behalf of the owners of the land at Hartley, commenced negotiations with the Authority to settle the dispute. Those negotiations were successful and on 11 February 2013, the owners of the land, SWR and the Authority entered into two deeds reflecting the terms of the settlement reached. In accordance with the terms of the settlement the Authority agreed to vacate the Hartley site and SWR assumed responsibility for the operation of the landfill. For its part, SWR agreed, amongst other things, to pay the sum of $990,000.00 to the Authority and to assume liability for all environmental performance issues, both past and future, in respect of the landfill.

7. At the risk of oversimplification, in the proceedings instituted in this Court SWR claimed that the Authority falsely represented that it had no pre-existing contract, arrangement or understanding with the constituent councils that would inhibit, or render less likely, the councils using the landfill and that the councils were free to contract with SWR to dispose of their waste at Hartley. After settlement two of the constituent councils stopped disposing of their waste streams at Hartley immediately. In time the other two did likewise. Had SWR known of the constituent councils’ contract, arrangement or understanding with the Authority, it claimed it would not have executed the deeds and taken over the landfill. Accordingly, SWR claimed that the Authority had engaged in misleading and deceptive conduct and that it was entitled to damages under the Australian Consumer Law. In the alternative, SWR claimed that the Authority had made misrepresentations inducing SWR to enter into a contract for which SWR was entitled to damages under the Misrepresentations Act 1972 (SA).

8. The Authority denied making the representations and denied that SWR was entitled to the relief it sought.

   The application to amend the Defence

9. The Authority applied to amend its Defence to incorporate a plea of:

   1.in relation to the claim of misleading and deceptive conduct, the failure on the part of SWR to take reasonable care to mitigate any loss or damage it may have sustained by reason of the asserted conduct of the Authority within the meaning of s 137B of the Competition and Consumer Act 2010 (Cth) (CACA); and

   2.in relation to the claim under s 7 of the Misrepresentations Act 1972 (SA), contributory negligence on the part of SWR within the meaning of s 7 of the Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA).

10. Wallmans solicitors represent the Authority. Mr Lumsden was the partner at Wallmans with the conduct of the matter. In his eighth affidavit, sworn 5 July 2016, Mr Lumsden deposed that the Authority’s Defence was settled by the then senior counsel retained and was filed in this Court on 20 March 2014. At the time, Mr Lumsden and senior counsel did not discuss the possibility of advancing contributory negligence in answer to SWR’s claim. Senior counsel was subsequently appointed to the judiciary with the consequence that Mr Cox SC was retained along with Mr Thomas as his junior. Mr Cox and Mr Thomas settled the Authority’s Second Defence which was filed in this Court on 1 June 2016.

11. At no stage prior to the filing of the Second Defence did Mr Lumsden discuss the possibility of the Authority pleading contributory negligence with Mr Cox or Mr Thomas. Mr Lumsden deposed to only discussing contributory negligence with Mr Cox and Mr Thomas after SWR opened its case. In particular, after a statement made by Mr Livesey QC in opening to the effect that contributory negligence was not available as a defence to a claim for breach of s 18 of the Australian Consumer Law.

12. Mr Lumsden denied that the application was made as part of a strategy to obtain a forensic advantage or any other advantage. Mr Lumsden’s affidavit was not challenged on the application.

13. Botten Levinson, solicitors, represented SWR. Mr Levinson was the partner at Botten Levinson with the conduct of the matter. In his fourth affidavit, sworn 7 July 2016, Mr Levinson deposed that he understood the Second Defence to address the causal connection between the conduct alleged by SWR as misleading and deceptive and the loss claimed by SWR in these proceedings. Mr Levinson said that he understood the Second Defence to assert, in effect, that the matters SWR pleaded were evident or should have been evident to SWR and that the alleged misrepresentation was not the cause of any loss as SWR asserted. He did not understand the Second Defence to assert a failure by SWR to take reasonable care to protect its own interests.

14. Due to his understanding of the Second Defence, Mr Levinson did not set about marshalling evidence to demonstrate the care that SWR took in relation to its own interests. Further, he did not question the witnesses SWR proposed calling for the purpose of including in any statements evidence that would assist in answering the contention that SWR failed to take reasonable care to protect its own interests. Nor did Mr Levinson take further statements from any witnesses or take any steps to proof witnesses on that issue. In addition he did not take any step to determine whether or not the assistance of experts was required and, if so, to identify who such experts might be. Further again, Mr Levinson did not do any of the things mentioned for the purpose of adducing evidence in support of an assertion that SWR had taken reasonable measures to mitigate its loss or to explain why such measures could not be taken or were not taken.

15. Because reasonable care and contributory negligence were never contemplated by Mr Levinson, SWR had not turned its mind to the same. Had the matters pleaded in the Authority’s proposed amended Third Defence been pleaded earlier then, Mr Levinson deposed, he would have interviewed SWR’s witnesses (including those who had already given evidence) on what steps they took to protect SWR’ interests and the extent to which, and any reasons why, reasonable or necessary steps were or were not taken (if any). In addition he would have approached an experienced company director or other person experienced in the acquisition of businesses similar to the landfill operation at Hartley to seek an opinion on the nature of the measures that would be taken by a reasonable purchaser in the position of SWR. Lastly, he would have drafted the amended Second Statement of Claim and SWR’s reply to deal expressly with the contentions now raised by the Authority.

16. Mr Levinson estimated that the additional work that would be required in the event that the Authority was permitted to amend its defence. He estimated that it would take a solicitor one week working full-time, but added that the nature of the task was such that it could not be done within one week; it would need to be spread over one and a half to two months. To this would be added the need to access counsel. He thought that junior counsel would be required for three to four days. He suggested that had the defences of reasonable care and contributory negligence been raised previously, most of this additional time that may now be required would not have been necessary because the process already undertaken could have uncovered the necessary evidence.

17. With respect to the possibility of calling an expert witness, Mr Levinson added that it would be necessary to identify potential experts, to distil relevant material and issues for such experts to consider and then to instruct them to provide an opinion. That, he considered, would take in the order of three to four full days.

18. Lastly, having obtained the statements of the relevant lay witnesses and any opinions from an expert or experts, it would be necessary to instruct Mr Morris, an expert already retained, to review his opinion as to loss to determine if any change was needed. That would take a further day.

19. Mr Levinson stated that it was not possible to undertake all the tasks that he foresaw would be required immediately. To undertake those tasks in the near future would depend upon the availability of all concerned. Some of the tasks would require documents or materials to be provided to witnesses and then time for them to consider and respond before further steps could be taken. In and amongst all of this Mr Levinson advised that his office would be moving premises in the near future and, in the course of taking up its new home, planned to introduce a new IT system. Mr Levinson said that bearing in mind the work that would have to be done if the application was allowed, he did not think SWR would be ready by the time the matter resumed on 17 August 2016.

    The applicable legal principles

20. Rule 54(4) SCCR provides:

    An amendment may be made—

    (a)with the Court's permission; or

    (b)with the consent of all other parties; or

    (c)as authorised by subrule (5).

21. Sub-rule (5) is not relevant for the purposes of determining this application.

22. The power is obviously discretionary. The discretion is to be exercised having regard to the objectives of the SCCR set out in rule 3, being:

    (a)     to establish orderly procedures for the just resolution of civil disputes; and

    (b)to facilitate and encourage the resolution of civil disputes by agreement between the parties; and

    (c)     to avoid all unnecessary delay in the resolution of civil disputes; and

    (d)to promote efficiency in dispute resolution so far as that object is consistent with the paramount claims of justice; and

    (e)     to minimise the cost of civil litigation to the litigants and to the State.

23. Rule 3 makes plain that in the exercise of the power contained in rule 54(4) the court is not confined to a consideration of matters relevant to the respective positions in which each of the parties find themselves. The efficient, timely and cost-effective resolution of the dispute consistent with the paramount claims of justice require that consideration also be given to the effect of an application to amend upon the administration of justice including the consequences for other litigants whose matters are awaiting trial or judgment.

24. The principles governing applications such as the present were discussed by the High Court in Aon Risk Services Australia Ltd v Australian National University (Aon).[1] Aon was analysed by Bleby J in Channel Seven Adelaide Pty Ltd v Manock (Manock).[2] Bleby J listed the following factors as relevant to determining whether to grant a late application to amend pleadings:[3]

    [1] (2009) 239 CLR 175.

    [2] [2010] SASCFC 59.

    [3] [2010] SASCFC 59 at [46].

    (1)     Whether there has been undue delay in making the application;

    (2)The extent to which there will be wasted public resources in granting the amendment;

    (3)Whether there will be inefficiency occasioned by the need to revisit interlocutory processes;

    (4)     Whether a trial date would need to be vacated or a trial adjourned;

    (5)     Whether there is any satisfactory reason for the delay in applying;

    (6)Whether the point to be raised by the amendment would be raised in any event at the trial;

    (7)     The likelihood of strain and uncertainty being imposed on the litigants;

    (8)Whether any further delay would undermine confidence in the administration of civil justice;

    (9)     Any other prejudice likely to be suffered by the other party;

    (10)    The additional costs likely to be incurred.

    [footnotes omitted]

    Submissions

25. Consistent with Mr Lumsden’s affidavit, counsel for the Authority submitted that the reason for the lateness of the amendment was simply one of oversight by the Authority’s legal advisers; as mentioned, the Authority’s legal advisors did not consider contributory negligence until prompted by counsel for SWR’s reference to contributory negligence in opening. It was only upon checking the position that it became clear to counsel for the Authority that the law had changed.

26. Counsel for the Authority submitted that the proposed amendments to the Authority’s Defence did not raise any new factual issues upon which evidence would be required. The proposed amendments related only to the question of contributory negligence and whether the extent of SWR’s alleged negligence was such as to break the chain of causation (assuming that the Authority had engaged in misleading and deceptive conduct). The effect of the plea, counsel submitted, was to ascribe a particular legal consequence (the reduction in SWR’s damages) to facts that were already in issue. Further, counsel submitted that there would be no disruption to the trial and, in particular, no prejudice to SWR’s conduct of the trial, if the amendment were permitted.

27. The application was opposed for three reasons. First, the amendments, if allowed, would cause SWR to suffer substantial prejudice of the type contemplated in Aon[4] and Manock[5] and of a type that was not amenable to remedy by an order for costs. The prejudice that SWR would suffer, it was submitted, included the strain and uncertainty imposed on its officers. At the time of the application, several of SWR’s witnesses had already given evidence and had been cross-examined. Thus it would be prejudicial to require those witnesses to be subjected to further examination and cross-examination.

    [4] (2009) 239 CLR 175.

    [5] [2010] SASCFC 59.

28. Whilst it was conceded that proof of an allegation of contributory negligence ultimately remained a matter for the Authority, it could not be doubted, it was submitted, that SWR bore an evidentiary onus of explaining what it did and did not do to protect its interests. That had not been attempted by SWR demonstrating not only that a new issue was being raised but, more importantly, that the new issue proposed by the Authority would prejudice SWR given that it had been raised so late.

1. Counsel submitted that if the question of whether SWR failed to take reasonable care for its own interests were pressed, SWR would wish to recall Mr Brown and have the opportunity to call evidence from an experienced company director on the topic of whether what SWR did accorded with recognised standards of prudence in connection with a transaction such as the one before the Court. Counsel added that one would readily expect this kind of evidence to be called in a case where the allegation is that a plaintiff had failed to take reasonable care for its own interests, as distinct from a causation debate involving a challenge to the evidence of the plaintiff’s witnesses on the issue of whether, notwithstanding the matters raised by the defendant, they nonetheless relied upon what was said or not said in the course of negotiations.

2. Secondly, counsel submitted that, as no new or previously unknown factual circumstance had come to light that could operate as a catalyst for the Authority’s application, it could be inferred that this matter was within the knowledge of the Authority at the time of its initial defence in March 2014. Alternatively, it could be inferred that no one adverted to the issue. Either way, the Authority had ample opportunity to raise the defence earlier.

3. Thirdly, no good explanation for the delay in raising the defence had been given by the Authority.

4. In reply, counsel for the Authority submitted that all of the matters particularised in the draft amendment relating to SWR’s failure to take reasonable care had already been the subject of extensive evidence. For example, Mr Brown had been examined on SWR’s failure to ask the Authority or its constituent councils for commitments regarding council waste streams and what the Authority intended to do at Brinkley, Mr Levinson had given evidence of the enquiries and investigations he undertook into the Authority’s structure and constitution and the Brinkley landfill, while Mr Pucknell and Mr Fairweather, in their statements, had addressed their dealings with the constituent councils prior to settlement in February 2013. Further, issues pertaining to the limited remaining capacity in cell 6, including that SWR could not obtain an accurate estimate of such capacity with a survey, had been addressed in evidence given by Messrs Brown, Jarvis and Manning, and were self-evident from the contemporary documents. Further again, even if there were a need to revisit SWR’s evidence, it would not be as lengthy a process as Mr Levinson suggested in his affidavit. Re-proofing witnesses was unlikely to reveal that SWR made more detailed investigations into the matters pleaded than already disclosed and it was unlikely that new statements would need to be taken from all of the witnesses or on all of the topics. Counsel submitted that it would take much less time to prepare supplementary statements than foreshadowed. In any event, counsel continued, the facts alleged in the draft Third Defence with respect to SWR’s failure to take reasonable care were not the subject of any serious dispute.

5. Contrary to SWR’s contention, counsel for the Authority submitted that the amendments gave no cause for further expert evidence; Mr Levinson’s contention that he would approach an expert to seek an opinion on the nature of the measures that would be taken by a reasonable purchaser in the position of SWR was, in the Authority’s opinion, misguided. The settlement between SWR, the Harveys and the Authority was not an “acquisition of a business” but, rather, an unusual sequence of negotiations between those parties. Thus, evidence of the practice of purchasing a business would be irrelevant to the matters addressed by the proposed amendments, being whether SWR failed to take reasonable care in assuming responsibilities to the Harveys and in negotiating to secure the Authority’s departure from the Harveys’ land. Counsel added that to the extent that expert evidence might be called, it could have been adduced in any event because, even in the absence of a plea of contributory negligence, it would have been relevant to a consideration of the reasonableness of SWR’s conduct and the enquiries it made. Lastly, there was no cause for a further report on quantum because even if the amendment was permitted, it would be for this Court to determine the primary liability of the Authority without regard to contributory negligence, and then, based on a comparison of the parties’ conduct, to apportion that liability between SWR and the Authority in accordance with s 137B CACA.

   Consideration

6. The Authority’s application was brought eight days into the trial. While delay in the making of the application does not of itself preclude the discretion being exercised granting leave to amend,[6] in Aon, Gummow, Hayne, Crennan, Kiefel and Bell JJ considered that delay in raising a defence would generally necessitate an explanation:[7]

   The fact that an explanation had been offered for the delay in raising the defence was regarded as a relevant consideration in JL Holdings. Generally speaking, where a discretion is sought to be exercised in favour of one party, and to the disadvantage of another, an explanation will be called for. The importance attached by r 21 to the factor of delay will require that, in most cases where it is present, a party should explain it. Not only will they need to show that their application is brought in good faith, but they will also need to bring the circumstances giving rise to the amendment to the court’s attention, so that they may be weighed against the effects of any delay and the objectives of the Rules. There can be no doubt that an explanation was required in this case.

   [6]    Grapecorp Management Pty Ltd (in liq) v Grape Exchange Management Euston Pty Ltd (2012) 265 FLR 33 at [120].

   [7]    Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at [103]

7. It is well established that leave to amend will be more readily granted before a trial date is fixed than at trial.[8] Where an amendment is sought during trial, the applicant bears a heavy burden in justifying the consequent burden to be imposed on the opposing party.[9]

   [8]    Horton v Jones (No 2) (1939) 39 SR (NSW) 305 at 310; Ketteman v Hansel Properties Ltd [1987] AC 189 at 220.

   [9]    Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at [4] per French CJ.

8. I did not doubt that the Authority’s application was brought in good faith. I accepted that the lawyers’ minds did not turn to consider the possibility of advancing contributory negligence and a want of reasonable care in answer to SWR’s pleaded case until after counsel for SWR had referred to contributory negligence in his opening. It seemed to me that to grant the application would not have meant tacitly approving of an abuse of process or to award a forensic advantage.

9. In Aon, Gummow, Hayne, Crennan, Kiefel and Bell JJ noted that mistakes and omissions commonly give rise to leave to amend being sought by parties.[10] The joint reasons went on to say, however, that a mistake in and of itself was insufficient reason to permit an amendment:[11]

   But it is not the existence of such a mistake that founds the grant of leave under rules such as r 501(a), although it may be relevant to show that the application is bona fide. What needs to be shown for leave to amend to be given, as the cases referred to above illustrate, is that the controversy or issue was in existence prior to the application for amendment being made. It is only then that it is necessary for the court to allow it properly to be raised to enable a determination upon it.

   [10](2009) 239 CLR 175 at [82].

   [11]   Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 at [82].

10. The present case differed significantly from the situation in Aon where the delay in seeking the amendment was the result of a deliberate tactical decision.[12] Here, I was satisfied that the application was not part of a plan to obtain some sort of tactical advantage, but the product of oversight.

    [12]   Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 at [4], [24].

11. In Aon, Heydon J observed that there was nothing to indicate that the information upon which the amendment was based was not available had greater diligence been exercised.[13] While I accepted that further and more detailed consideration by a party’s lawyers, or the retention of new counsel, should not be seen to provide parties with a licence to amend pleadings at any stage of the proceedings,[14] I was reluctant to visit the consequences of oversight by a party’s lawyers upon the Authority. Given the then relatively recent enactment of s 137B CACA, and noting in particular SWR’s erroneous belief, I considered that the oversight invited leniency.

    [13]   Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 at [82].

    [14]   PPG Development Pty Ltd v Capitanio [2016] SASC 169 at [70].

12. Satisfied that the application was brought in good faith and that the Authority had provided an adequate explanation for its delay, it was then necessary to consider whether contributory negligence and SWR’s failure to take reasonable care were, in effect, in issue prior to the making of the application. Generally, permission to file a proposed amended pleading should only be granted if no further material facts would be pleaded.[15] As indicated, the Authority’s position was that the amended defence simply ascribed a legal consequence to facts already in issue.

    [15]   Morgan v Roberts [2006] SASC 15 at [1]; Pope & Ors v Harris Orchard [2010] SASC 354 at [24]; Nitschke v Foraco Australia Pty Ltd (2014) 120 SASR 162 at [42].

13. I was satisfied that the material facts upon which any allegation of want of reasonable care or contributory negligence would largely be contested were already in issue on the pleadings as they then stood in relation to the issues of causation and whether the alleged conduct was actually misleading or deceptive or likely to mislead or deceive. SWR’s case was founded in part upon the failure to disclose certain matters amounting to misleading and deceptive conduct. In determining whether the failure to disclose was misleading and deceptive, an important consideration was whether SWR had a reasonable expectation that such matters would be disclosed by the Authority. SWR’s knowledge and what it might reasonably be expected to know would be a relevant consideration in that regard.[16] The question of what SWR knew or ought to have known invited attention to the reasonableness of SWR’s conduct, including what enquiries it made or failed to make concerning the matters allegedly not disclosed.[17] Contrary to SWR’s contention, the question of SWR’s carelessness was not limited to the issue of causation, but in a non-disclosure case was relevant to whether the Authority’s conduct was in fact misleading. In Miller & Associates Insurance Broking Pty Ltd v BMW Finance Australia Ltd, French CJ and Kiefel J made it clear that a party is not obliged to volunteer information purely “in order to avoid the consequence of careless disregard, for its own interests, of another party of equal bargaining power and competence”.[18] The boundary between a careless disregard for one’s own interests and a reasonable expectation that another will disclose or warn may be difficult to identify, but it invites consideration nonetheless of the extent to which a party ought be expected to protect itself as a factor relevant to whether a failure to disclose is misleading or deceptive or likely to mislead or deceive. Accordingly, I was satisfied that the material facts relevant to a defence of contributory negligence and a failure to take reasonable care to protect one’s own interest were largely already raised on the pleadings.

    [16]   Miller & Associates Insurance Broking Pty Ltd v BMW Finance Australia Ltd (2010) 241 CLR 357 at [18]-[20].

    [17]   Miller & Associates Insurance Broking Pty Ltd v BMW Finance Australia Ltd (2010) 241 CLR 357 at [91].

    [18] (2010) 241 CLR 357 at [22]; Mercland Investment Group Pty Ltd v Duncalm Pty Ltd [2012] FCA 183 at [117]; Wolfe v Permanent Custodians [2012] VSC 275 at [360], [376].

14. I also accepted and had regard to the evidential onus on a new issue that nonetheless would arise and be borne by SWR in the event that the application was granted.

15. I was sympathetic to the inconvenience caused to SWR in having to revisit matters and possibly recall witnesses, however I was of the view that SWR overestimated the time it would require to address the proposed amendment. As counsel for the Authority pointed out, SWR need only reinterview some witnesses about some matters.

16. I considered that it may be that some trial time may be lost. If that occurred, I did not think it would be for a particularly long time or that it would occasion substantial delay to the trial and finalisation of the matter because sitting days were, in any event, fractured with significant periods of time in between.

17. I considered the disruption to the trial that would be occasioned by the amendment and the extent to which granting the amendment would result in inefficiency and the wastage of public resources. The delay and disruption occasioned by an adjournment of the trial not only impacts SWR, but also affects the resources of the courts. Aon emphasised the need to have regard to the inevitable broader impact of delay and disruption to proceedings upon other court.[19]

    In the proper exercise of the primary judge’s discretion, the applications for adjournment and amendment were not to be considered solely by reference to whether any prejudice to Aon could be compensated by costs. Both the primary judge and the Court of Appeal should have taken into account that, whatever costs are ordered, there is an irreparable element of unfair prejudice in unnecessarily delaying proceedings. Moreover, the time of the court is a publicly funded resource. Inefficiencies in the use of that resource, arising from the vacation or adjournment of trials, are to be taken into account. So too is the need to maintain public confidence in the judicial system. Given its nature, the circumstances in which it was sought, and the lack of a satisfactory explanation for seeking it, the amendment to ANU’s statement of claim should not have been allowed. The discretion of the primary judge miscarried.

    It appears that a factor in the decision of the primary judge and of the Court of Appeal was the decision of this Court in JL Holdings. That case arose out of an entirely different factual setting. However, to the extent that statements about the exercise of the discretion to amend pleadings in that case suggest that case management considerations and questions of proper use of court resources are to be discounted or given little weight, it should not be regarded as authoritative. …

    [Footnotes omitted]

    [19]   Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at [5]-[6] (French CJ).

18. The trial in the present case was not set to resume until 17 August 2016. Despite being originally listed for 10 days, the trial now looked like it would run three times as long and more. In having to find more time it was not possible to find 20 successive sitting days convenient to the Court, counsel and the parties.

19. Some disruption to the orderly progress of the trial, in the sense of requiring SWR to recall witnesses, would undoubtedly be occasioned. In Aon,[20] Heydon J said that the desirability that litigation be dealt with expeditiously is heightened with respect to commercial litigation. Notwithstanding that, I did not think that the inefficiency that granting the application would occasion in this case would be so great as to outweigh the reasons for granting the application.

    [20]   Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at [137].

20. Clearly, to grant the amendment would result in an additional call on judicial and court resources. However, given that I estimated any adjournment to be relatively minor, any re-examination of witnesses to be relatively short, and I anticipated the length of the trial would exceed current estimates and more time have to be found in any event, I did not think that to grant the application would amount to a material wastage of public resources over and above what was already unavoidable. Here I also had in mind the Court’s duty to do justice between the parties. I considered it highly unlikely that any delay or inefficiency caused by granting the amendment would be of a sufficient magnitude to invite genuine concern as to the use of the Court’s time or resources, or in a broader sense, the capacity of the courts to efficiently and effectively deal with complex commercial disputes.

21. The joint reasons in Aon emphasised that the strain litigation places upon parties, including commercial litigants, associated with delay or disruption in proceedings, was an important consideration in the determination of whether to grant an application to amend:[21]

    The views expressed by Lord Griffiths in Ketteman v Hansel Properties Ltd, that justice cannot always be measured in money and that a judge is entitled to weigh in the balance the strain the litigation imposes upon litigants, are also now generally accepted. In Bomanite Pty Ltd v Slatex Corporation Aust Pty Ltd, French J said of Bowen LJ’s statements in Cropper v Smith:

    “… That may well have been so at one time, but it is no longer true today … Non-compensable inconvenience and stress on individuals are significant elements of modern litigation. Costs recoverable even on an indemnity basis will not compensate for time lost and duplication incurred where litigation is delayed or corrective orders necessary.”

    In Ketteman Lord Griffiths recognised, as did the plurality in JL Holdings, that personal litigants are likely to feel the strain more than business corporations or commercial persons. So much may be accepted. But it should not be thought that corporations are not subject to pressures imposed by litigation. A corporation in the position of a defendant may be required to carry a contingent liability in its books of account for some years, with consequent effects upon its ability to plan financially, depending upon the magnitude of the claim. Its resources may be diverted to deal with the litigation. And, whilst corporations have no feelings, their employees and officers who may be crucial witnesses, have to bear the strain of impending litigation and the disappointment when it is not brought to an end. The stated object in the Court Procedures Rules, of minimising delay, may be taken to recognise the ill-effects of delay upon the parties to proceedings and that such effects will extend to other litigants who are also seeking a resolution in their proceedings.

    [footnotes omitted]

    [21]   Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at [100]-[101].

22. Prolonged uncertainty is a particularly relevant consideration in commercial litigation.[22] However, I did not think that the strain imposed upon SWR’s witnesses were the application granted would be overly burdensome. This was not a case where lives in effect were put on hold pending the outcome of the litigation. As SWR had said, in the scheme of things the acquisition of the Hartley landfill was not of great moment to the ResourceCo Group. That is not to downplay the significance to the parties and in particular Mr Brown and Mr Lucas of what is at stake. It is merely to observe that the litigation had not hampered them in the same way and to the same extent as it might other litigants. I was of the view that in these circumstances, to the extent that strain and uncertainty would follow from the grant of the application, costs would go a long way toward ameliorating those consequences.

    [22]   Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at [137].

1. In Cement Australia Pty Ltd & Ors v Australian Competition and Consumer Commission,[23] the Federal Court observed that Aon, while providing guidance on the factors to be considered on an application such as the present, in particular timeliness, efficiency and cost in reaching a “just resolution”, did not require the blanket denial of applications to amend:[24]

   Aon Risk is not a one size fits all case. Whilst various factors are identified in the judgment as relevant to the exercise of discretion, the weight to be given to these factors, individually and in combination, and the outcome of that balancing process, may vary depending on the facts in the individual case. As the plurality in Aon Risk observed at [75], statements made in cases concerning amendment of pleadings are best understood by reference to the circumstances of those cases, even if they are stated in terms of general application.

   [23] (2010) 187 FCR 261.

   [24]   Cement Australia Pty Ltd & Ors v Australian Competition and Consumer Commission (2010) 187 FCR 261 at [51].

2. In all the circumstances I was satisfied, for the reasons I have given, that the factors supporting the grant of the application outweighed the negative consequences of doing so, such that it was appropriate that I exercise my discretion in favour of granting the Authority permission to amend its defence.

   The application for production of privileged documents

3. The Authority sought the production of numerous documents contained in exhibits D15 and D27. Subsequently the request was refined to seeking production of:

   -      the following documents listed in Exhibit D15:

   ·119: Letter of settlement offer to S Lumsden version 2 dated 12 November 2012;

   ·137: Letter to S Lumsden re settlement offer version 4 dated 13 November 2012;

   ·141: Letter of settlement offer to S Lumsden version 3 of settlement offer dated 13 November 2012; and

   ·All documents in that list which are stated to be the subject of a claim for legal professional privilege.

   -      the following documents listed in Exhibit D27:

   ·221: email from J Levinson to S Brown and C Pucknell on 14 August 2012 re Adelaide Hills Region Waste Management Authority (AHRWMA) minutes from 8 March 2012;

   ·222: email from C Pucknell to J Levinson sent 4 October 2012;

   ·223: email from J Levinson to S Brown, D Lucas and C Pucknell regarding Brinley sent on 5 November 2012;

   ·224: email from A Manning to J Levinson re Environment Protection Authority (EPA) licence amendments sent on 18 December 2012;

   ·228: email from J Levinson to A Manning re Planning Consent sent 19 December 2012;

   ·232: email from A Manning to C Pucknell and J Levinson re EPA licence sent 16 January 2013;

   ·234: email from J Levinson to C Pucknell, S Brown and A Manning re Cell 6 space sent 23 January 2013;

   ·235, 236, 237, 238, 239, 240 and 241: emails between C Pucknell and J Levinson re Cell 6 space sent on 23 January 2013;

   ·243: email from J Levinson to S Brown and C Pucknell sent 23 January 2013 enclosing letter and deed from S Lumsden dated 22 January;

   ·244: email from J Levinson to A Manning, C Pucknell and S Brown re Survey information Cell 6 sent 24 January 2013;

   ·245: email from C Pucknell to S Brown and J Levinson re Survey information Cell 6 sent 24 January 2013;

   ·246: email from C Pucknell to J Levinson re Survey information Cell 6 sent 24 January 2013;

   ·250: email from A Manning to C Pucknell and J Levinson re meeting with M Lorenz sent 25 January 2013;

   ·251: file note dated 25 January 2013 – record of meeting between J Levinson and C Pucknell – transaction issues, warranties and further details;

   ·252: email from J Levinson to A Manning re request for further details from AHRWMA sent 25 January 2013;

   ·253: email from J Levinson to C Pucknell and A Manning with draft deed and letter to S Lumsden re cell capacity etc sent 25 January 2013;

   ·255: email from J Levinson to S Brown and C Pucknell re EPA licence sent 1 February 2013;

   ·256: email from J Levinson to C Pucknell, A Manning and S Brown re discussions with EPA sent 4 February 2013;

   ·257: email from J Levinson to S Brown, C Pucknell, A Manning and Harveys re warranties and other matters sent 4 February 2013;

   ·258: email from C Pucknell to J Levinson re Lumsden email 4 February and Cell space sent 5 February 2013;

   ·265: email from C Pucknell to J Levinson re cell space sent 3 July 2013;

   ·266: email from B Jarvis to A Manning re cell space instructions to BL sent 9 August 2013;

   ·267: email from J Fairweather to J Levinson re record of meetings sent 19 September 2013; and

   ·273: email from J Fairweather to J Levinson re record of discussion sent 14 October 2013.

4. SWR claimed that each of the documents sought were prepared for the dominant purpose of obtaining legal advice and thus were privileged. The Authority contended that privilege had been impliedly waived.

   The applicable legal principles

5. In Legal Services Commission v W, JH the Full Court said:[25]

   [25] (2012) 223 A Crim R 534 at [69]-[74]. See also British American Tobacco Australia Ltd v Secretary, Department of Health and Ageing (2011) 195 FCR 123 at [41]-[46].

   The High Court has considered whether the conduct of a person entitled to claim legal professional privilege amounts to a partial or complete waiver of that claim to privilege. In Mann v Carnell (1999) 201 CLR 1 Gleeson CJ, Gaudron, Gummow and Callinan JJ summarised the position as follows:

   [28]At common law, a person who would otherwise be entitled to the benefit of legal professional privilege may waive the privilege. It has been observed that “waiver” is a vague term, used in many senses, and that it often requires further definition according to the context. Legal professional privilege exists to protect the confidentiality of communications between lawyer and client. It is the client who is entitled to the benefit of such confidentiality, and who may relinquish that entitlement. It is inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege. Examples include disclosure by a client of the client’s version of a communication with a lawyer, which entitles the lawyer to give his or her account of the communication, or the institution of proceedings for professional negligence against a lawyer, in which the lawyer’s evidence as to advice given to the client will be received.

   [29]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. Thus, in Benecke v National Australia Bank, the client was held to have waived privilege by giving evidence, in legal proceedings, concerning her instructions to a barrister in related proceedings, even though she apparently believed she could prevent the barrister from giving the barrister’s version of those instructions. She did not subjectively intend to abandon the privilege. She may not even have turned her mind to the question. However, her intentional act was inconsistent with the maintenance of the confidentiality of the communication. 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.

   [footnotes omitted]

   We make two comments on this passage. First, that the Court is not concerned with “some overriding principle of fairness operating at large”. The Court is concerned with the question of whether there is an inconsistency between disclosure of some related material and insistence upon legal professional privilege in respect of other material, the question of inconsistency being considered on the basis that it is “… informed by considerations of fairness”. The two examples which the Court gave in the passage set out above are readily understandable. There is an evident inconsistency in a client giving evidence of communications with the client’s legal advisor, and asserting privilege so as to deny the ability of the legal advisor to give his or her version of the communication. The relevant subject matter in that setting is the content of the communication between the client and legal advisor. In the present case the relevant subject matter is not the instructions given by Mr T to his lawyers, over a period of time. The subject matter is the version of events upon which he planned to plead guilty.

   In the more recent decision of Osland v Secretary, Department of Justice (2008) 234 CLR 275 Gleeson CJ, Gummow, Heydon and Keifel JJ summarised the relevant principle in similar terms: at [44].

   In Attorney-General (NT) v Maurice (1986) 161 CLR 475 the Court was concerned with an application on behalf of certain Aboriginals claiming to be traditional owners of a number of areas of land. In the course of the proceedings in which those claims were made the claimant traditional owners filed with an Aboriginal Land Commissioner, who was considering the claims, a claim book in which certain material in support of the claim was set out. Without going into detail, there was some analogy between the claim book and a pleading in a civil action. The question that arose was whether this use of the claim book amounted to a waiver of legal professional privilege in relation to the source materials used to prepare the claim book, but not forming part of it and not mentioned in it. The Court held that there had been no waiver of privilege in the source material.

   Gibbs CJ identified the issue as whether “… the use in legal proceedings of one document impliedly waives privilege in associated material”: at 482.  He went on to say at 483:

   … the question is whether the disclosure or use of material that has been made renders it unfair to uphold the privilege in the associated material, and although the question whether the material that has been disclosed has been used in evidence is relevant, it is not decisive.

   Mason and Brennan JJ put the matter as follows (at 488):

   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 Company v Home Insurance Company [1981] 1 WLR 529.

   We note that the focus of all members of the Court was on the question of whether, as Mason and Brennan JJ put it, maintenance of the claim of privilege would give rise to “an inaccurate perception” of the communication disclosed.  In Maurice the Court did not consider whether or not access to the source material might assist the appellant, or might throw light on what was in the claim book.  Once again, in Maurice one finds the Court paying careful attention to the nature of the communication relied upon as giving rise to an implied waiver.

   There is no shortage of cases in which the question of waiver of legal professional privilege has arisen.  What these cases demonstrate is the fact sensitive nature of the inquiry, and no better example of that can be found than the decision in Maurice.  The principles stated in Mann v Carnell and in Osland are clear enough, although expressed in general terms. …

   Submissions

6. Counsel for the Authority submitted that to the extent that the documents may have been subject to legal professional privilege, such privilege had been waived by the manner in which SWR had conducted its case before and during trial by:

   1.     The broad allegations in its pleadings;

   2.Its disclosure and production of documents — in particular, its selective waiver of privilege over documents relating to key issues in dispute;

   3.The contents of its witness statements;

   4.The evidence adduced from its witnesses at trial and the failure of SWR to object to questions concerning communications between SWR’s witnesses and solicitors evidencing relevant knowledge and inquiries; and

   5.The tendering of particular documents at trial and the failure of SWR to object to the tendering of those documents.

7. The pleadings make plain that the Authority contests SWR’s claim to have relied on the misrepresentations the Authority allegedly made. In particular, SWR alleged that it entered into the deeds executed upon settlement having been led by the Authority to believe that the Authority would not compete for the waste streams of the constituent councils and that there was no contract, arrangement or understanding preventing or inhibiting the councils from taking their waste to Hartley. Given the nature of the alleged representations, coupled with the fact that SWR was legally advised on the content of the settlement agreements, it was likely that SWR’s state of mind upon entry into the agreements would have been influenced by the advice of its solicitors. Accordingly, it was submitted that waiver arose from the pleading alone.

8. In relation to pre-trial disclosure, counsel for the Authority contended that SWR had disclosed very few documents that went towards proving its knowledge or awareness of the nature and intentions of the Authority and its legal and practical relationship with the constituent councils and the operation of the councils as it had claimed privilege over the vast majority of those documents. Nonetheless the production of some documents touching on the issues was inconsistent with the maintenance of the privilege in the balance.

9. Turning to SWR’s witness statements, counsel noted that they addressed the broad issues of knowledge, investigation and reliance/causation. SWR’s evidence opened up to scrutiny communications between SWR’s directors and officers and SWR’s solicitors in the period from 2011 to 13 February 2013.

10. Counsel further submitted that it was apparent from the evidence given to date that SWR did in fact have regard to the advice of its solicitors. For example, Mr Lucas said that he relied on Mr Brown and Mr Levinson to convey relevant information to him. Further, Mr Levinson had given evidence of his inquiries into the operations and activities of the Authority before the agreements were entered into and that he reported at least some of the information he discovered to his client. Those inquiries went directly to the issue of whether SWR had a reasonable expectation that the Authority would disclose certain matters in negotiations and to the issue of reliance on the alleged representations.

11. Counsel proceeded to deal with each of the documents sought.

12. Counsel submitted that document 221 was relevant as it went towards showing exactly when SWR became aware of the re-establishment of Brinkley and what SWR knew, something that SWR’s witnesses had been unable to recall when giving evidence. The internal email the subject of document 222, was relevant as proof of what SWR knew in relation to the space available in cell 6. Document 223, and the “flurry” of Brinkley related communications in the list of privileged documents around this date, occur around the time the aerial photo of Brinkley was obtained and when the EPA licence for Brinkley first appears in Mr Levinson’s file. Counsel submitted that this document was relevant to the Authority’s argument that Mr Levinson was acting more in the capacity of independent investigator than lawyer and some of the communications were therefore not covered by legal professional privilege. Documents 224, 228 and 232 relate to the EPA licence amendments and application for planning approach which were relevant as they potentially undermined SWR’s reliance case by showing that SWR was looking at options for Hartley to take additional waste streams and, therefore, was not simply relying on the constituent council waste streams. The same argument applied to documents 255 and 256. Documents 234 through to 241 were emails between Mr Levinson and SWR from 8.52am to 10.35am on 23 January 2013 regarding the space available in cell 6. The interchange was triggered by the receipt of an email from Mr Lumsden. Counsel submitted that it could be inferred that the email exchange was in response to whatever Mr Lumsden had put, as evidenced by the email in reply sent from Mr Levinson to Mr Lumsden at 10.54am (document 242 on the list). Further, counsel submitted that it could be inferred that documents 243 through to 246, despite being after the response email at 10.54am, were in response to the Lumsden email. Counsel submitted that the documents were relevant to what SWR knew about the available space in cell 6 up until 13 February 2013. Privilege had been waived, it was submitted, by the pleadings, by SWR’s evidence in court and in the witness statements served.

13. Counsel pointed out that privilege had been waived over all emails discussing the various drafts of the settlement deeds as they were key to SWR’s state of mind in relation to matters such as cell space and post-settlement waste depositing. Consequently, counsel submitted that privilege had been waived over documents 250 through to 253 as well as documents 257, 258, 265, 266 and 267 as they related to establishing exactly what SWR truly believed in relation to the conditions of the deeds executed upon settlement, and arguably could raise doubts about SWR’s allegation of reliance on certain representations.

14. Counsel submitted that document 273, a record of discussion between SWR’s sales and marketing manager, Mr Fairweather, and Mr Levinson, was inadequately described on the list and left the Authority guessing as to what the discussion was about. Because Mr Fairweather had been involved in meetings with the constituent councils, counsel submitted that it could be inferred that the discussion had something to do with the approaches to the constituent councils and would therefore be highly relevant to how SWR regarded potential approaches to the councils.

15. Counsel addressed the documents in Exhibit D15 more broadly. He submitted that there were a number of documents listed relating to drafts of the settlement deeds and concerning the available space in cell 6 and the securing of council waste. These documents, he submitted, had been exposed to scrutiny by the way SWR had pleaded and run its case and were highly relevant to SWR’s overarching allegation of reliance. Counsel submitted that these documents might shed light on SWR’s knowledge or its investigation of relevant matters.

16. Counsel also challenged the claim for privilege over documents 119, 137 and 141. In this regard counsel queried whether the documents had been prepared for the dominant purpose of giving or receiving legal advice as they appeared to relate to drafts of commercial settlement proposals.

17. In all the circumstances, counsel concluded, it would be unfair to the Authority if the case were to be determined by reference only to the documents that SWR had chosen to produce, rather than all of the documents that are relevant to the determination of the issues. He added that the degree of unfairness that would result may be gauged by reference to SWR’s lists of privileged documents. The lists clearly showed that SWR was in close contact with its solicitors throughout the negotiation of the settlement agreements and there was a large number of documents for which privilege was claimed recorded as communications involving Mr Levinson and representatives of SWR.

1. In response counsel for SWR contended that strictly the relevant enquiry was whether the acts of SWR did or did not constitute waiver. Further, the obligations of the parties as to disclosure were confined to the issues that were directly relevant on the pleadings. The mere pleading of reliance and causation did not give rise to any inconsistency with the maintenance of privilege in legal advice. Neither did the fact that the state of mind of SWR was in issue. Further, at no place in its pleading did SWR seek to deploy the content of any legal advice obtained. In relation to the Authority’s submission that “[w]aiver arises from the pleadings alone”, counsel for SWR said that this was simply too wide. The fact that the Authority asserted that SWR’s state of mind would have been influenced by legal advice (even if that assertion were correct) was not sufficient to constitute a waiver of privilege. What the Authority had to do, but failed to do so, was (1) identify the relevant state of mind of SWR; (2) identify legal advice going to that state of mind; and (3) identify where the plaintiff had deployed the content of that legal advice (or part of that legal advice) relevant to that state of mind.

2. In relation to pre-trial disclosure, the Authority relied on the pre-disclosure of four documents which went to the issue of knowledge as implicitly inconsistent with the maintenance of privilege on all documents going to the same issue. SWR submitted that those documents could not possibly constitute a waiver of privileged material as none of those documents were privileged. Further, even if they were privileged, there was no waiver simply because SWR’s knowledge and state of mind were in issue.

3. Turning to SWR’s witness statements, counsel submitted that they went no further than the pleading in relation to state of mind and reliance. Thus, for the same reasons as the pleading, the witness statements did not give rise to an implied waiver of privileged legal advice.

4. In relation to SWR’s evidence at trial, the matters relied upon by the Authority were almost entirely matters raised by the Authority in cross-examination. SWR repeated its earlier submission that failure to object did not, constitute an abandonment of the privilege. In any event, SWR never sought to deploy its legal advice and none of the examples provided by the Authority went to the content of the privileged legal advice provided to SWR.

   Consideration

5. I was satisfied that the Authority’s submission that, given the nature of the alleged representations and the fact that SWR was legally advised on the settlement agreements, it was likely that SWR’s state of mind upon entry into the agreements would have been influenced by the advice of its lawyers and that therefore privilege was implicitly waived, was too broad. In fact, I considered that it was inconsistent with the authorities. In DSE (Holdings) Pty Ltd v Intertan Inc Allsop J expressed the view:[26]

   I would have thought it too broad a statement to say that a pleading of a state of mind to which legal advice is or might be materially relevant is an adequate surrogate for the expression of principle in Mann v Carnell.

   [26] [2003] FCA 384 at [52].

6. The question is not whether SWR had put its state of mind in issue but whether it had directly or indirectly put the contents of the otherwise privileged communications in issue, either in making a claim or by way of defence.[27]

   [27]   Archer Capital 4A Pty Ltd as trustee for the Archer Capital Trust 4A v Sage Group Plc (No 3) [2013] FCA 1160 at [15]. See also Commissioner of Taxation v Rio Tinto Ltd [2006] FCAFC 86 at [65].

7. I was satisfied that at no point in its pleadings did SWR seek to deploy the content of any of its legal advice. SWR had simply put in issue its state of mind. This was different to putting in issue the content of privileged legal advice. Similarly, SWR’s witness statements went to the pleaded issues and did not constitute an implied waiver of privilege. Further, the disclosure of documents relevant to an issue over which privilege could not be claimed was not inconsistent with the maintenance of privilege in documents potentially relevant to the same issue.

8. I was also satisfied that SWR had not waived privilege through failing to object to specific questions asked of its witnesses. The present matter was distinguishable from the circumstances arising in Spedley Securities Ltd (in liq) v Bank of New Zealand[28] (Spedley). Spedley involved a privileged document that was in circulation, was known about by both parties and was subject of questions asked in evidence. The failure to claim privilege in those circumstances led to a finding that privilege had been abandoned. The questions asked of the witnesses in the current case did not go to the content of the documents subject of the current claim but rather went more generally to questions about the fact of speaking to a lawyer.

   [28] (1991) 26 NSWLR 711.

9. Given the above, I was satisfied that SWR had not directly or indirectly put the content of privileged communications in issue. The only thing that had been put in issue was SWR’s state of mind and knowledge, both of which were necessary to an action for misleading or deceptive conduct. Therefore, I was satisfied that there was no inconsistency between disclosure of some related material and insistence upon legal professional privilege in respect of other material. Accordingly, I considered that privilege had not been waived.

   The Notice to Produce

10. On 21 June 2016, the Authority filed a notice for SWR to produce documents said to be in the possession of SWR. The notice, issued under rule 215 SCCR, identified the following 14 categories:

    1.Documents recording SWR’s engagement of KPMG to structure an arrangement with the Harvey family.

    2.Documents evidencing communications between SWR and KPMG in relation to SWR’s dealings with the Harvey Family, including notes of meetings in relation to SWR’s dealings with the Harveys and communications in relation to the Landfill Deed and Litigation Management and Funding Deed.

    3.Documents evidencing communications between Botten Levinson and SWR and/or KPMG in relation to dealings with the Harvey Family, including the draft Landfill Deed and Litigation Management and Funding Deed prior to 14 August 2012.

    4.Notes of all meetings between representatives of SWR and members of the Harvey Family.

    5.Documents evidencing internal communications within SWR in relation to the Landfill Deed and Litigation Management and Funding Deed and drafts of those deeds.

    6.Documents evidencing communications with the EPA prior to 13 February 2013 in relation to SWR taking over the Authority’s EPA licence in relation to Hartley without the consent of the Authority.

    7.Copies of all annual reports and other publicly available documents of the Authority and its member councils obtained or printed by representatives of SWR between 20133 and 13 February 2013.

    8.Documents evidencing or recording knowledge or assessment by SWR or its advisers of the activities of the Authority between 2011 and 13 February 2013.

    9.Documents evidencing or recording knowledge or assessment by SWR or its advisers of the Authority’s proposal to re-establish Brinkley.

    10.All drafts of the Hartley Information Paper (D7.254), and all documents evidencing the internal or external transmission of those drafts or the final version of that paper.

    11.Copy of the review by Ernst & Young of the Hartley and Brinkley facilities.

    12.Documents evidencing communications with John Heard (Chairman of SWR) and David McMahon (Director of SWR) in relation to dealings with the Harveys and the settlement with the Authority, created in the period between prior to 13 February 2013.

    13.Complete copies of the entire emails sent by Anthony Brazzale and Chris Pucknell at TB7.232, TB7.233, TB7.234 showing the unidentified recipients of those emails.

    14.A copy of the agreement between SWR or Resource Co and the owners of the land on which the McLaren Value facility is situated.

    Applicable legal principles

11. Rule 215(1) SCCR provides:

    215—Production of documents at trial

    (1)     A party must produce at the trial a document in the party’s possession if—

    (a)the party referred to the document in a document filed in the action; or

    (b)the document was disclosed in a list of documents filed by the party in the Court; or

    (c)another party has, by notice to the party, required production of the document at the trial; or

    (d)    the Court orders its production.

12. As with a subpoena, a party must comply with a notice to produce unless excused by the Court. In Trade Practices Commission v Arnotts Ltd[29] (Trade Practices Commission) Beaumont J outlined the questions to be asked when determining an application to set aside a subpoena for documents. The same approach can be adopted where a party seeks to avoid answering a notice to produce. Beaumont J stated:[30]

    …it is convenient to address the present application in the first instance by reference to two questions: (1) Does the material sought have an apparent relevance to the issues in the principal proceedings, i.e., is adjectival, as distinct from substantive, relevance established? Does the subpoena have a legitimate forensic purpose to this extent? This involves a consideration of the matter from the standpoint of Arnotts. (2) Is the subpoena seriously and unfairly burdensome or prejudicial? This is to look at the matter from the point of view of Mattingly.

    [29] (1989) 88 ALR 90.

    [30]   Trade Practices Commission v Arnotts Ltd (1989) 88 ALR 90 at [44].

13. The standard of relevance proposed by Beaumont J in Trade Practices Commission[31] was considered by Spender J in Cosco Holdings Pty Ltd v Commissioner for Taxation & Anor:[32]

    I take his Honour’s conclusion expressed in that paragraph as an acquiescence to the correctness of the submission that the material sought could reasonably be expected to throw light on some of the issues in the principal proceedings. It is not a question of looking at the documents to see if the documents might permit a case to be made.

    [31] (1989) 88 ALR 90.

    [32] (1997) 37 ATR 432 at 439.

14. In Seven Network Limited v News Limited (No 5), Sackville J suggested that relevance requires a consideration of whether the documents are “reasonably likely to add, in the end, in some way or other, to the relevant evidence in the case”.[33] A “reasonable likelihood” was considered by Perram J in Sportsbet Pty Ltd v State of New South Wales (No 9) to “connote[s] a degree of certainty as to the material’s potential relevance that travels beyond the merely conjectural”. [34]

    [33]   Seven Network Limited v News Limited (No 9) [2010] FCA 31, citing Spencer Motors Pty Ltd v LNC Industries Ltd [1982] 2 NSWLR 921 at 927.

    [34] [2010] FCA 31at [4].

    Submissions

15. Counsel for the Authority commenced his submissions by stating that the documents listed in the notice to produce were clearly relevant to the issues to be determined by this Court and yet SWR’s disclosure had thus far been deficient. He pointed to the fact that SWR had disclosed an extremely limited number of documents dated earlier than 11 February 2013. Of those documents, the majority concerned matters relating only to the Hartley landfill site. Very limited documents created prior to 11 February 2013 concerned the meetings and dealings with the Authority and the constituent councils, and the remaining documents were either operational in nature, concerned cell space or concerned issues relating to the EPA. It was surprising, counsel continued, that while SWR had disclosed only a very limited number of documents created before 11 February 2013 for which it did not claim privilege, it appeared that during that same period, approximately 500 privileged documents were created. That said, counsel conceded that it was unknown how many privileged documents there were from 2011 to 14 September 2012 or from the period post 13 February 2013 given that the list of privileged documents provided by SWR only covered the intervening period. Counsel concluded by submitting that SWR should be ordered to disclose and produce the documents in the light of the evidence of SWR’s witnesses at trial and the importance of the documents to a just resolution of the proceedings.

16. When first the court heard submissions on the notice counsel for SWR advised that SWR was in the process of undertaking searches for the relevant documents as well as considering the issue of privilege. Upon resuming, counsel informed the Court that SWR was still in the process of gathering documents, but was able to advise that there were no documents answering the description in categories 6, 7, 10 and 12 of the notice. At the time, he was not able to meaningfully advance SWR’s response to the balance of the documents sought without further instructions.

17. Subsequently, Mr Levinson, in his fourth affidavit, sworn 7 July 2016, deposed that a search for the documents the subject of the notice to produce had been undertaken. He deposed that SWR did not have in its possession any further documents falling within the classes referred to in categories 1, 2, 3, 4, 5, 6, 7, 8, 9, 10 and 12 of the notice to produce beyond those already disclosed. Further, he deposed that SWR did not have any other copies of the documents subject of category 13 apart from the photocopies of the hard copy version already provided. Consequently, the application was reduced to categories 11 and 14.

18. Counsel for the Authority submitted that Mr Levinson did not disclose the extent or adequacy of the search for the documents sought. It was added that there was reason to doubt the adequacy of the search. For example, with respect to the copies of the emails from Mr Brazzale and Mr Pucknell subject of category 13 of the notice to produce, whilst it was said that SWR did not have further copies of those documents, Mr Levinson did not explain whether Mr Brazzale and Mr Pucknell or the likely recipients of the email had attempted to locate electronic copies of the documents which would reveal the identity of the recipients. He added that with respect to these particular documents, and the notice to produce more generally, SWR should explain in more detail what searches and inquiries had been undertaken in response to the notice.

    Consideration

19. Category 11 in the notice to produce sought a copy of the review conducted by Ernst & Young of the Hartley and Brinkley facilities. Mr Brown gave evidence at trial that the review suggested that SWR could service the constituent councils for $400,000 less than the cost of the Brinkley facility. Category 14 referred to the agreement between SWR or ResourceCo and the owners of the land on which the McLaren Vale landfill was situated. Counsel submitted that the documents potentially relate to the state of knowledge of SWR, its reliance upon the alleged misrepresentations and whether SWR made or failed to make reasonable enquiries concerning the matters which were, allegedly, not disclosed by the Authority.

20. I was satisfied that it was reasonably likely that both of the documents were relevant to the issues in dispute; category 11 with respect to SWR’s state of knowledge and the enquiries it made into the facilities’ operation in order to exercise reasonable care for its own interests before entering the deeds, and category 14 with regard to the kinds of condition SWR had agreed to in its previous commercial deeds concerning the operation of landfill sites which may shed light on the issue of SWR’s standard practices in exercising reasonable care for its own interests. The Authority had, therefore, a legitimate forensic purpose in seeking these documents in order to mount its defence on the issues of causation and contributory negligence. I did not think the Authority was embarking on a “fishing” exercise.[35] SWR had not given any indication that it would be placed under an undue burden or suffer prejudice by producing the documents.[36] The Authority might suffer a disadvantage if the documents the subject of the application were not made available to it. Accordingly, I ordered production of the documents subject of categories 11 and 14 in the notice to produce dated 27 June 2016.

    [35]   Bailey v Beagle Management Pty Ltd (2001) 105 FCR 136.

    [36]   Trade Practices Commission v Arnotts Ltd (No 2) (1989) 88 ALR 90 at 103; Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Emergency Transport Technology Pty Ltd (2011) 277 ALR 388 at [13].

21. Categories 1-5 of the notice shared a common theme of interaction between SWR, the Harveys and KPMG with regard to the creation of the Landfill Deed and the Litigation Management and Funding Deed. Counsel submitted that these documents were relevant because they go to the question of causation and reliance with respect to SWR’s entry into the Landfill Deed which committed it to paying a royalty of $100,000 per annum minimum to the Harveys for 20 years.

22. Category 6 related to Mr Brown’s evidence that SWR was speaking to the EPA about taking over the EPA licence. Counsel submitted that prior to entering the Landfill Deed, SWR engaged in conversations with the EPA about taking over the EPA licence, which would place SWR in a position to immediately receive the waste. He said that in light of this, SWR was continually threatening to kick the Authority off the site, prohibiting it from operating the landfill and thereby preventing the constituent councils from depositing waste at the Hartley site. Counsel alleged that the actions of SWR in this respect suggested that it knew the constituent councils would then necessarily have to use other landfills, taking their business elsewhere, which went directly to the issue of SWR’s reliance, as well as the Authority’s liability, in terms of whether or not any misrepresentations were made by the Authority.

23. I was satisfied that the aforementioned categories 1-5 and 6 were relevant to SWR’s state of knowledge prior to its entry into the Deeds. In particular, the items were relevant to SWR’s failure to take reasonable care for its own interests in agreeing to pay the royalties to the Harveys knowing that it may not receive any waste from the constituent councils and without having discussed with the Authority or the constituent councils the continued disposal of council waste streams at Hartley once SWR took over the site.

24. I was also satisfied that the documents referred to in categories 7 and 8, being copies of annual reports and other publicly available documents of the Authority and its constituent councils obtained by SWR between 2011 and 13 February 2013, and documents evidencing SWR’s knowledge of the activities of the Authority during that time period, were relevant to SWR’s state of knowledge and understanding of the risks associated with entering into the deeds. Documents evidencing that SWR or its advisers had knowledge of the Authority’s proposal to re-establish the Brinkley site, communications between SWR’s Chairman and Director relating to the settlement with the Authority and dealings with the Harveys prior to entry into the Landfill Deed, and drafts of the Hartley Information Paper, are similarly relevant.

25. I considered the documents relevant to the issue of reliance and liability in that they might touch on whether SWR made reasonable enquiries in order to protect its own interests, and whether the Authority did indeed make the representations SWR alleged it made. I was satisfied that to this extent, the Authority had a legitimate forensic purpose in requesting the production of the documents, and in their absence, a detailed explanation of the search undertaken to obtain them should be provided. In light of the relevance of the potential documents to the Authority’s defence, I was of the view that it was appropriate for SWR to provide a detailed explanation of the investigations and inquiries it undertook in order to conclude that SWR was not in possession of the documents sought.