Spotless Group Ltd v Premier Building and Consulting Group Pty Ltd
[2006] VSCA 201
•29 September 2006
SUPREME COURT OF VICTORIA
COURT OF APPEAL
No. 8264 of 2003
| SPOTLESS GROUP LTD ENSIGN SERVICES (AUST) PTY LTD SPOTLESS SERVICES LTD | Appellants |
| v. | |
| PREMIER BUILDING & CONSULTING PTY LTD KEEN PLANNING SERVICES PTY LTD | Respondent |
| Appellant | |
| v. | |
| PREMIER BUILDING & CONSULTING PTY LTD | Respondent |
JUDGES: | WARREN, C.J., CHERNOV and NEAVE, JJ.A. | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 14 June 2006 | |
DATE OF JUDGMENT: | 29 September 2006 | |
MEDIUM NEUTRAL CITATION: | [2006] VSCA 201 | |
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Practice and Procedure – Documents produced on subpoena – Privilege – Legal professional privilege – Re-communication of privileged communication to third parties in confidence – Whether legal professional privilege attaches to communications – Waiver – Whether disclosure inconsistent with privilege – Common interest privilege.
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| APPEARANCES: | Counsel | Solicitors |
| For Spotless Group Ltd & Ors | Mr J.E. Middleton, Q.C. with Mr T.J. Walker | Freehills |
| For Keen Planning Services Pty Ltd | Mr J.H. Gobbo, Q.C. with Mr D.V. Aghion | Deacons |
| For the Respondent | Mr G.J. Digby, Q.C. with Mr N. Pane and Mr T.R.O. Boston | Gadens Lawyers |
WARREN, C.J:
I have had the benefit of considering the reasons of Chernov, J.A. in draft form. For the reasons stated by his Honour I agree that the appeal should be dismissed.
CHERNOV, J.A.:
The appellants, who are the principal defendants in the proceeding, appeal with leave against the judgment of a judge of the Trial Division, made on 29 July 2005, upholding the respondent’s objection to the inspection by the appellants of subpoenaed documents produced to the court, by third parties to the proceeding, pursuant to Rule 42.10 of the Rules of the Supreme Court. The objection to such inspection was based on the contention that the documents were protected by legal professional privilege that belonged to the respondent. It was the appellants’ case below, which it maintained on appeal, that legal professional privilege did not attach to the documents in question or, alternatively, if it did, it was waived by the respondent’s conduct that was constituted by its disclosure of the privileged information to its financiers and others in a manner inconsistent with the confidentiality which the doctrine serves to protect. The respondent, on the other hand, contends that his Honour was correct in his above conclusion. It also filed a notice of contention, dated 15 May 2006, seeking to support the decision below on the issue of waiver on the basis that common interest privilege attached to the communications. The respondent specifically declined to argue this point below and the appellants before us claimed that it should not be entitled to withdraw this election or concession without leave and that leave should be denied. In any event, the appellants said, the relevant interests of the respondent and the respective third parties in matters pertaining to the respondent were not such as to give rise to common interest privilege.
It is convenient to mention at this point that, the appellants comprise two groups of defendants. Each group was represented before us by separate counsel
who divided the arguments between them, but since each counsel adopted the submissions of the other, I shall disregard this distinction for present purposes and simply consider collectively the arguments put for the appellants. Before dealing with the issues raised in the appeal, however, it is necessary to describe the proceeding and the background to it, including the documents in question.
Background to proceeding
The respondent, Premier Building & Consulting Pty Ltd, is a builder and developer.[1] Between about July 2001 and March 2003 it constructed, at 227 Barkly Street, Brunswick, 49 apartments and 81 basement car parking spaces without first obtaining a relevant certificate or statement of environment audit pursuant to the Environment Protection Act 1970. By September 2002, all 49 apartments were sold “off the plan”. But because the land on which they were constructed and the underground water located there were contaminated with chemicals, the respondent was unable to obtain the necessary consent of the Environmental Protection Authority and, consequently, a certificate of compliance for the purposes of the Subdivision Act 1988. It therefore was compelled to cancel the contracts of sale and undertake remedial works at considerable cost. In the result, it brought the proceeding on 7 October 2003 claiming damages of $21m. There are presently ten defendants against whom the respondent alleges negligence and other breaches. Relevantly, the respondent’s principal claim in the proceeding is that the contamination resulted from the dry cleaning and laundry operation business conducted on the adjoining land by the first appellant, Spotless Group Ltd, and some of its associated companies, three of which are defendants in the proceeding (“the Spotless parties”). The respondent also claims damages against its former town planning advisor, Keen Planning Services Pty Ltd (“Keen”), alleging that it was negligent and breached the relevant provisions of the Trade Practices Act 1974 (Cth) and the Fair Trading Act 1999 when advising it in relation to the development. The respondent has also brought proceedings in the Victorian Civil and Administrative Tribunal against the Spotless parties and others, claiming damages under s.15 of the Water Act 1989 and the Environment Protection Act 1970.
[1]On 18 April 2006 a receiver was appointed to take control of its assets.
In order to pay for the purchase of the land and its development and, later, this proceeding, the respondent borrowed money from Colonial First State Investment Ltd (“CFS”) which has, at all relevant times, conducted its finance business through a broker, Balmain NB Commercial Mortgages Pty Ltd (“Balmain”),[2] and the loans that it made to the respondent were administered on its behalf by Australian Mortgage Administration Ltd (“AMAL”). We are only concerned with the loans that were made to the respondent for the purpose of funding the litigation. In that respect, although each of the three companies (collectively hereafter called “the financiers”) performed a separate role in relation to the provision of funds to the respondent in respect of the litigation, Balmain and AMAL did so effectively as agents of CFS. Importantly, as his Honour found, each financier had a legitimate interest in the furtherance of the litigation by the respondent either as financier or prospective financier (or administrator of the loans) and, as will be explained later, received the documents in question solely in that context. At all relevant times the respondent retained Anne Marie Moon, a partner in Baker & McKenzie, as solicitor in the proceeding and she, in turn, briefed Mr Digby, Q.C. in the matter. It is also relevant to note that, shortly after the contamination of the subject property became a public issue, the respondent retained Royce (Vic) Pty. Ltd. (“Royce”), a business and communications strategist, to advise it how best to deal with the issue publicly and with relevant authorities.
[2]Balmain ceased to have any involvement with this project in late 2003 or early 2004.
In the course of the proceeding the Spotless parties filed subpoenas that were directed to Balmain, AMAL and Royce, essentially seeking, in the case of Balmain and AMAL, the production of documents that passed between each of them and others and the respondent in relation to the development and, in the case of Royce, all communications relating to the presence or suspected presence of contaminants on the subject land. The documents sought were produced by the subpoenaed parties to the Prothonotary. It was said by the respondent that some of the documents so forwarded related to the proceeding and were subject to legal professional privilege. Consequently, it notified the Spotless parties of its objection to the inspection of the documents. The Prothonotary then referred the matter to the judge who was managing the litigation. Before his Honour, Keen supported the claim of the Spotless parties for the inspection of the documents and itself sought inspection. The documents in question are described in his Honour’s reasons and for present purposes it is sufficient to summarise them in the following groups:
(a)Communications between Baker & McKenzie and some of the financiers that contain legal advice that had been provided to the respondent.
(b)Copies of such communications, disseminated by the receiving financier to one or both of the other financiers, including communications that refer to and/or summarise the respondent’s legal advice.
(c)Copies of Baker & McKenzie invoices, enclosing its detailed bills of costs, that had been provided to the respondent, forwarded by Baker & McKenzie to one or more of the financiers on the instructions of the respondent.
(d)Copies of such copy bills of costs that were forwarded by the receiving financier to one or both of the financiers.
(e)Royce documents comprising –
(i)a communication between Baker & McKenzie and Royce containing legal advice;
(ii)copies of communications between Baker & McKenzie and counsel containing legal advice;
(iii)a draft document with hand-written annotations made by the respondent’s counsel and a draft media release marked up with amendments by Baker & McKenzie. It was claimed by the respondent that the writings constituted legal advice.[3]
[3]The documents referred to in paras. (a), (b) and (e) above were referred to at trial as Category 1 documents; and those in paras. (c) and (d) as Category 2 documents.
It was the respondent’s case before his Honour that the documents in question were given to its advisors on a confidential basis for the purpose of facilitating the provision of their services to it. Thus, it was claimed, the documents in paragraph (a) were sent to the financiers only for the purpose of keeping them up to date as to the opinion of the respondent’s lawyers about the status of the proceeding and its prospects of success in the case. The dissemination of such communications referred to in paragraph (b) between the financiers was made in a like context and for the same purpose. Similarly, it was said, the documents in paragraphs (c) and (d) were made available to the financiers, either directly or by way of dissemination between them, only for the purpose of providing them with particulars of the work done by the respondent’s lawyers in relation to the litigation. The provision of such material, it was said, was a pre-condition to finance being made available to the respondent for payment of the invoices. As to the documents in (e) (“the Royce documents”), it was claimed that they too were disclosed to Royce on a confidential basis in order to enable it to provide its services to the respondent within the context of the latter’s legal position as seen by its lawyers.
The principal affidavit on which the respondent relied in support of the claim for privilege was that sworn by Ms Moon on 25 May 2006. This important affidavit was surprisingly brief and assertive but, as his Honour observed, he was not invited to reject that evidence and no application was made to cross examine the deponent. Ms Moon swore, amongst other matters, that in relation to the material provided to the financiers, “the information was disseminated to persons with an obligation to keep the plaintiff’s affairs confidential. It was not intended that any legal professional privilege be waived”. Ms Moon set out the circumstances in which the subject documents were provided to the financiers. Essentially, she said, she was asked by CFS to update it regularly as to the respondent’s strategy and prospects of success in the litigation and that, after obtaining approval from the respondent to provide such information to the financiers, she did so. This material, she said, included copies of advice that was provided by her and counsel to the respondent, as well as summaries of it.
Ms Moon explained in her affidavit that, on the instructions of the respondent, she forwarded detailed memoranda of costs to the financiers for payment. She also said that such memoranda contained detailed descriptions of discussions between the respondent and its legal advisors and, in many instances, made apparent the legal advice that was provided to the respondent in relation to the litigation. In respect of the Royce documents, Ms Moon stated in her affidavit of 14 June 2005 that they contained expressions of legal advice and opinion in relation to the litigation.
His Honour accepted that the documents that were provided to the financiers, including the bills of costs, contained legal advice that was provided to them in circumstances of confidence. Each financier, said his Honour, “had a legitimate interest in the furtherance of the litigation by [the respondent], either as a funder or prospective funder or as an advisor or agent of the funder or of [the respondent] in respect of [the action], and … had no other interest in doing sending or receiving the documents.” His Honour accepted that the dissemination of that information between the financiers was also made on a confidential basis and only in the furtherance of that legitimate interest. Thus, his Honour concluded that the documents were subject to legal professional privilege and that, in the circumstances, the privilege was not waived.
As to the Royce documents, his Honour said that the “privileged material” was passed to Royce in circumstances where it was confidential and for use for the limited purpose of mitigating the impact on the respondent of the contamination problem on its land. The learned judge seems to have accepted that the Royce material contained legal advice and was subject to legal professional privilege and that this privilege had not been waived by the respondent. His Honour placed some significance, in this regard, on the fact that there was no suggestion that Royce had, in the course of its commission, made public any of the material.
Sundry issues
Before dealing with the appellants’ principal argument, it is convenient to deal with a number of related submissions. First, it was said for the appellants that his Honour erred in concluding that the documents in question were provided to the respondent’s legal advisors on a confidential basis because the evidence did not support such a finding. In my view, however, although Ms Moon did not say, in terms, that the material forwarded to the financiers, for example, was given to them on the basis that it was to remain confidential, it is quite apparent that is what she was asserting. I have already noted that it was not put to his Honour by the appellants that Ms Moon’s evidence in this regard was inadmissible and they did not seek to cross-examine her or otherwise challenge her evidence. In the circumstances, I consider that it was open to his Honour to make the impugned conclusion.
Secondly, the appellant’s primary contention in relation to the memoranda of costs that were forwarded to the financiers was that they were merely unprivileged third party communications. The appellants also contended that, absent judicial inspection by his Honour, it was not in fact proved that they disclosed the nature and content of legal advice so as to attract the privilege. It is true that his Honour did not inspect the documents in question but, equally, his Honour was not obliged to do so, and I consider that it was open to his Honour, on the evidence before him, to conclude that the memoranda relevantly contained legal advice. So much was asserted in the affidavit evidence of Ms Moon which, as I have noted, was unchallenged by the appellants.
Next, it is apparent from the evidence, and was open for his Honour to find, that each of the financiers performed an integral role in the provision of finance to the respondent and did so pursuant to a common goal or purpose, namely, to facilitate the funding of the litigation. It was as if CFS, which provided the funds, acted in that respect with the assistance, or through, two agents, Balmain and AMAL.
It was also contended for the appellants that his Honour failed to determine whether legal professional privilege existed in relation to the documentation in question, but assumed that was the case, and considered only whether the privilege had been waived. In my view, as I have noted, it is plain enough from his Honour’s reasons, read as a whole, that he concluded that the information that was conveyed to the financiers and Royce, and the material that was disseminated by the financiers amongst themselves, was subject to legal professional privilege. His Honour accepted, on the basis of the evidence before him that was not challenged by the appellants, that the documents contained, or disclosed, the nature and content of legal advice.
Appellants’ primary case
I now turn to the appellants’ principal case that was effectively put in two parts. First, it was said, even if the third party communications were made on a confidential basis, legal professional privilege did not attach to them because they were not made for “privileged purpose”, namely, for the dominant purpose of receiving legal advice or for use in litigation. It was next said that, in any event, even if the legal advice was relevantly privileged, the respondent impliedly waived it by disclosing it to third parties, such disclosure being inconsistent with the confidentiality the privilege serves to protect. In that regard, the appellants contended that there was no evidence that the disclosures were made, or received, on terms of confidentiality and that no limitation was placed by the respondent, or its lawyers, upon who might be permitted to peruse the information that was disclosed. It was further submitted that disclosure for commercial purposes, and not for purposes related to the procurement of legal advice or for use in litigation, was relevantly inconsistent. It was also said that there was no consideration of “fairness” that militated against the application of the doctrine of waiver by disclosure.
The appellants’ argument in support of the claim that no legal professional privilege attached to the third party communications was put along the following lines. It was first said, in reliance on statements by various members of the High Court in Commissioner of Australian Federal Police v. Propend Finance Pty Ltd,[4] that, since legal professional privilege attaches to communications and not to documents that contain the communication, each communication had to be examined separately to determine if it is the subject of legal professional privilege. And such privilege would only attach, it was said, if the communication was made for a “privileged purpose”, namely, for the dominant purpose of obtaining legal advice or use in litigation. In the present case, the appellants argued that because the original communications – those containing legal advice to the respondent – were provided for a “privileged purpose”, they were subject to legal professional privilege. But the third party communications, it was said, were not made for a “privileged purpose” and, consequently, were not subject to legal professional privilege. This submission essentially reflects the dissenting view of McHugh, J. in Mann v. Carnell.[5] His Honour relevantly said[6] that for legal professional privilege to inhere, each communication must be made for the dominant purpose of obtaining legal advice or use in litigation – so that, for example, privilege in a communication or document (which is uncontroversially privileged) may be lost where it is communicated for another purpose. The learned judge said:
[4](1997) 188 C.L.R. 501.
[5](1999) 201 C.L.R. 1.
[6]At 32.
“Documents are protected as part of a privileged communication. That means that the question whether a copied document recording a communication was made for a privileged purpose cannot be answered by asking whether the original document recording the communication was created for a privileged purpose. Privilege does not inhere in documents per se. Where a copy of a document, to which privilege attaches, has been communicated to another person, the question whether it is also protected by privilege depends on whether the copy was communicated for a privileged purpose.
That being so, whether privilege attached to the copied documents depends on whether they were sent by Ms Carnell to [the member] for a privileged purpose. In my opinion, they were not sent for such a purpose.”
His Honour considered[7] that, in the case before the court, the documents were provided “to address … concern at an alleged ‘monumental waste of public funds’” and, thus, were not privileged.
[7]At 32.
There are a number of difficulties with the appellants’ submissions. First, I consider that Propend is not helpful to the appellants’ argument. That case was concerned with whether copies of documents could be regarded as being subject to legal professional privilege in circumstances where the “originals” were not. Thus, necessarily, the question in that case was whether the subsequent communications that were constituted by the provision of the copy documents to a party’s legal advisors were privileged “in their own right”. It was in that context that their Honours said that, in order for a communication that takes the form of a copy document to attract legal professional privilege “in its own right”, it was necessary to establish that it was created for a “privileged purpose”. The court concluded that since the copy documents in question were made for the sole[8] purpose of obtaining legal advice they were subject to legal professional privilege. Their Honours did not say, however, that a copy of a document, the original of which was relevantly privileged, if communicated to a third party in confidence, cannot be the subject of legal professional privilege unless it is established that it was made for a “privileged purpose”.
[8]That the relevant purpose had to be a “dominant purpose” was confirmed in the later decision of Esso Australia Resources Ltd v. Commissioner of Taxation (1999) 201 C.L.R. 49.
Secondly, the decision of McHugh, J. in Mann on which the appellants relied was, as I have indicated, a dissenting view and gains no support from the decision of the majority in that case which this Court must obviously follow. I will come back to the majority’s reasons.
Characterisation of third party communications
It seems to me that the appellants’ argument mischaracterises the third party communications. It is true, and it is unremarkable, that privilege attaches to the communication and not to documents per se. But the relevant communication that is “recorded”, as it were, by the documents in question is the communication to the respondent of legal advice. To contend that the “communication”, essentially, is the fact of transmission, as the appellants appear to do, is to make the same error as conflating the communication with, for example, a document. It is common ground that the original communication, namely, the legal advice that was provided to the respondent, was subject to legal professional privilege. And it was that communication – that advice - that was passed on to the third parties. That the re-communication was in written form is, as I have said, irrelevant to this issue. What is of relevance is that, on its proper characterisation, the communication that was made to the third parties, effectively by the respondent, was the legal advice which it had received and to which privilege attached. There is no need, in those circumstances, to ask whether the re-communication was made for a “privileged purpose”. Rather, the relevant question is, as it was in Mann, whether by “passing on” that communication to the third parties the respondent had waived the privilege.
In my view, such an analysis accords with the underlying basis of the decision of the majority in Mann. In that case, the Australian Capital Territory Government settled a proceeding brought against it by Dr Mann for breach of contract and defamation without admitting liability. Subsequently, Dr Mann wrote to a member of the Legislative Assembly of the Territory about the conduct of the litigation. The member passed the complaint to the Chief Minister who sent the member, in confidence, copies of documents containing legal advice that the government had received about the litigation, which was obviously the subject of legal professional privilege, to enable him to consider the reasons for the impugned conduct. As the majority said[9] the purpose of the communication was “to satisfy [the member] that the litigation, and the settlement, did not involve a waste of public funds, and that those who represented the Australian Capital Territory had acted responsibly and in accordance with legal advice.” In due course, the member returned the copy documents to the Chief Minister but retained the covering letter, a copy of which he sent to Dr Mann. It seems that Dr Mann formed the belief that the legal opinions might have been defamatory and gave him the right to seek damages against the Chief Minister. Consequently, he applied for preliminary discovery of the legal advice contending that the privilege had been waived. In the High Court it was argued for Dr Mann that the copies of the advice were not privileged because the communication to the member was not made for a “privileged purpose”. Alternatively, it was said, the communication of the advice to the member amounted to a waiver of legal professional privilege that attached to the original advice.
[9]Gleeson, C.J., Gaudron, Gummow and Callinan, JJ., at 8.
The majority said[10] that “the principal question in this appeal is whether legal professional privilege which attached to certain communications was lost by a subsequent disclosure of those communications”. It seems to me, however, that their Honours impliedly accepted that the communications to the member, by way of copies of the legal advice, were subject to legal professional privilege given that, as a matter of substance, they contained the legal advice that was provided to the government and which was plainly privileged. That the re-communication took the form of copy documents was irrelevant. In the circumstances, it is understandable that their Honours considered that the principal question was whether there has been waiver of the privilege. What the majority relevantly said[11] was:
“It being acknowledged that the original written communications had been the subject of legal professional privilege, there was an issue as to whether the privilege had been lost by reason of the disclosure by the respondent to [the member] of those communications.
The outcome does not turn upon the particular manner in which the content of the privileged communications was disclosed to [the member]. The privilege attached to the communications, not to the pieces of paper on which they were written. What [the member] was shown were copies, but they were relevantly copies of privileged communications. The question is whether the disclosure to [the member] of the communications resulted in the loss of the privilege.”
[10]At 4.
[11]At 8–9.
That the re-formulation or reproduction in another document of an original communication that is subject to legal professional privilege does not deprive the second document of the protection notwithstanding that the copied or subsequent document was not specifically created for the dominant purpose of “the obtaining legal advice or for use in litigation” has also been recognised in State Bank of South Australia v. Smoothdale (No.2) Ltd.[12] In that case King, C.J., with whom the other members of the court agreed, rejected an argument that certain witness statements were not protected by legal professional privilege merely because, in form, they were prepared in order to comply with certain court rules and not for the (dominant) purpose of legal advice or use in litigation. His Honour said:[13]
“I think that the argument is fallacious. The documents in question are in substance merely a reproduction of statements already obtained from witnesses for the sole purpose of use in the proceedings, in a form suitable for compliance with the order. They do not lose their character as statements of witnesses because they are prepared with a view to compliance with the order.”
This serves to illustrate, as I have said, that the relevant communication where privileged information is “re-communicated”, as it were, is not the fact or circumstance of the reformulation or re-communication but rather the communication giving rise to the privilege in the first instance.
[12](1995) 64 S.A.S.R. 224.
[13]At 226.
In the circumstances, I would reject the appellants’ claim that the legal advice in the third party communications in this case was not subject to legal professional privilege merely because it was not communicated for a “privileged purpose”.
Waiver
Thus, the question that must now be resolved is whether his Honour erred in deciding that there was no waiver of the legal professional privilege that attached to the documents in question. In that context it is to be borne in mind that, as I have noted, on his Honour’s findings, the communications to and between the financiers (and to Royce) were made in confidence and, in the case of documents given to the financiers for the purpose of facilitating and/or funding the litigation, and in the case of the Royce documents for it to conduct and manage the public relations campaign on behalf of the respondent.
A number of matters may be said in relation to the operation of waiver and its application to this case. First, it is clear enough that the question of express waiver does not arise here, and the contrary was not suggested by the appellants’ counsel. Secondly, it seems to have been accepted by the majority in Mann[14] that merely because the disclosure of the relevant material was voluntary does not necessarily mean that the privilege has been waived. So much is also evident from Goldberg v. NG,[15] to which the majority in Mann referred, characterising the communication as involving the “disclosure of a privileged communication to a third party, for a limited and specific purpose, and upon terms that the third party treat the information disclosed as confidential”.[16] In that case a solicitor disclosed to the Law Society of New South Wales a draft brief to counsel that he had prepared, it seems, in anticipation of court proceedings against him by one of his clients, the client having made a separate complaint to the professional body. The disclosure was made in response to the Law Society’s inquiries and for the purpose of the solicitor answering the complaint on the express terms that the documents remain confidential and without prejudice to legal professional privilege. By majority,[17] it was held that the solicitor had waived his right to privilege in circumstances where the two proceedings essentially arose from the same dispute, the disclosure had been voluntary and the solicitor effectively had sought to utilise the material adversely to the client in the Law Society matter. It was also significant that he had not provided to the Law Society any other written response, on which the client could have relied, as he would have otherwise been required to do. Importantly, as their Honours noted in Mann,[18] despite the division in opinion in that case as to whether the privilege had been waived, “the reasoning of all members of the Court was inconsistent with the proposition that any voluntary disclosure to a third party necessarily waives privilege”. In that context, their Honours referred,[19] with seeming approval, to the following statement of Jordan, C.J.:[20]
“The mere fact that a person on some one occasion choses to impart to another or others advice which he has received from his solicitor indicates no intention on his part to waive his right to refuse on other occasions to disclose in evidence what that advice was, and supplies no sufficient reason for depriving him of a form of protection which the law has deemed it specially necessary to throw around communications between solicitor and client.”[21]
[14]At 14.
[15](1995) 185 C.L.R. 83.
[16]At 14.
[17]Per Deane, Dawson and Gaudron, JJ., Toohey and Gummow JJ. dissenting.
[18]At 14.
[19]At 14.
[20]Thomason v. Campbelltown Municipal Council (1939) 39 S.R. (NSW) 347 at 355. I note also their Honours’ reference to a line of authority that suggests that disclosure of privileged information to a third party for a limited and specific purpose does not amount to waiver. See, for example, British Coal Corporation v. Denis Rye Ltd(No 2) [1988] 1 W.L.R. 1113 and Gotha City v. Sotheby’s (No 1) [1998] 1 W.L.R. 1238.
[21]The majority in Mann made plain that the reference by the learned Chief Justice to “intention” should not be taken to be the subjective intention of the person who is entitled to the benefit of legal professional privilege. Rather, the matter is to be determined objectively.
Their Honours explained[22] that it is the inconsistency between the conduct of the client and its insistence on confidentiality which effects a waiver of privilege. The majority said that disputes as to whether implied waiver has occurred “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.” Thus, as their Honours pointed out,[23] a client’s disclosure of legal advice, for the purpose of explaining or justifying its actions, “or for some other purpose” will amount to waiver if such disclosure involves relevant inconsistency and, in that inquiry, “considerations of fairness may be relevant”. The test to determine if there is such inconsistency is an objective one so that implied waiver may be found notwithstanding that it may not reflect the party’s subjective intention.[24]
[22]At 13.
[23]At 15.
[24]Mann at 13.
It has been said in some cases that waiver occurs if the conduct of the person entitled to legal professional privilege is such as would make it unfair to the other party in a way going to the integrity of the legal process for the privilege to be maintained.[25] Their Honours in Mann, however, explained[26] that, although considerations of fairness may be relevant to whether there is the relevant degree of inconsistency, it is not fairness per se that is considered for the purpose of determining whether there has been waiver, nor is fairness an overriding principle. Their Honours said:
“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.”
The question whether there is such inconsistency may be approached having regard to the rationale of the privilege which, in Attorney General (N.T.) v. Maurice,[27] Mason and Brennan, JJ. described as facilitating the administration of justice through the “fostering of trust and candour in the relationship between a lawyer and a client”.
[25]See, for example, Telstra Corporation Ltd v. BT Australasia (1998) 85 F.C.R. 152 at 166 per Branson and Lehane, JJ., and Commissioner of Taxation v. Rio Tinto Ltd [2006] FCAFC 86 at [56] per Kenny, Stone and Edmonds, JJ.
[26]At 13-15.
[27](1986) 161 C.L.R. 475 at 487. See also Grant v. Downs (1976) C.L.R. 674 at 685 per Stephen, Mason and Murphy, JJ.
In the present case, looking first at the documents that went to the financiers, it was submitted for the appellants that the conduct of the respondent in causing them to be disclosed was inconsistent with its maintenance of confidentiality in respect of them. But as I have mentioned, his Honour found, and it was open for him to do so, that the financiers had a legitimate interest in facilitating the funding of the litigation and the documents in question were sent to them, and were disseminated between them, in the furtherance of the respondent’s pursuit of its litigation and in the context of confidentiality. The purpose of the privilege here was to protect the confidentiality that the respondent was entitled to claim in respect of the legal advice that constituted an integral part of the communication, and, in my view, there is nothing inconsistent with that purpose in the respondent communicating that advice to the financiers on a confidential basis in order to secure funds to enable him to pursue the litigation.
As to the Royce documents, for the reasons I have given, it may be accepted for present purposes that they were forwarded to Royce on a confidential basis and that the reason for the communication was to appraise it of the respondent’s legal position and so facilitate its commission of Royce, within that ambit, to prepare the public relations campaign to meet the negative publicity about the contamination on the respondent’s land and its construction on it of the apartments. I note in passing that there seems to have been little evidence before his Honour that the two Royce documents that contained the hand-written annotations of counsel and the amendments of the solicitor amounted to legal advice. But his Honour implicitly held that that was the case and there was no contention put forward by the appellants to the contrary. In the circumstances, I consider that for the same reasons that the communication to the financiers did not involve waiver by the respondent, there has been no waiver by it of the privilege in relation to the Royce documents. In my view, there is no inconsistency between the respondent providing the Royce documents to the public relations advisor for information for a limited and specific purpose and insisting on their non-disclosure to the other parties to the litigation on the basis of legal professional privilege. And, for the reasons I have given in relation to the documents that were given to the financiers, there was no unfairness in the respondent continuing to claim privilege in relation to the documents in question.
Accordingly, I would reject the appellants’ claim that the respondent had impliedly waived legal professional privilege in respect of the third party communications.
Notice of Contention
For the purpose of completeness, I turn to consider briefly the respondent’s claim that no waiver occurred in relation to the documents forwarded to its advisors because they and the respondent had sufficient identity of interest in relation to the subject matter of the documents such as to give rise to the operation of common interest privilege. As I have noted, the respondents specifically declined to argue this point below and have raised it for the first time in Notice of Contention filed on 16 May 2005. The appellants have contended before us that, having made such an election or concession at the hearing below, the respondent requires leave to withdraw from that position before it can argue this point on appeal.
I consider, however, that we should accept the respondent’s argument that, properly characterised, the alleged “election” or “concession” below on its part in relation to this issue was essentially no more than an indication to his Honour that the point would not be pressed. Importantly, it has not been suggested by the appellants that they would have conducted their case below in a materially different way had the respondent then pressed the common interest privilege. Thus, it seems to me, no prejudice would be suffered by them if the matter were to be argued on appeal. I note that Rule 64.17(5) of the Rules of the Supreme Court contemplates, in terms, that the respondent is entitled to seek in its Notice of Contention that the judgment below be upheld by reference to an argument that had not been put below. In the circumstances, I consider that the respondent should be at liberty to argue this point without the need to obtain leave, but if leave were required, I would grant such leave.
In my view, however, the respondent’s claim as to the existence of common interest privilege should be rejected. Common interest privilege was described by Lord Denning, M.R. in Buttes Gas & Oil Co v. Hammer (No 3)[28] as a privilege in aid of anticipated litigation in which several persons have a common interest. His Lordship said:[29]
“It often happens in litigation that a plaintiff or defendant has other persons standing beside him – who have the self-same interest as he – and who have consulted lawyers on the self-same points as he – but these others have not been made parties to the litigation.“
An often cited illustration is the identity of interest between an insurer and the insured, another that between partners in a common pursuit. In those circumstances the privilege of the parties has been described as being “simply a defence to an assertion that legal professional privilege has been waived”.[30] I consider, however, that there is no relevant community of interest between the parties in respect of the litigation such as to found such privilege. So far as the financiers are concerned, it is true that they and the respondent had an interest in the litigation. But their respective interests in it were relevantly different. The respondent had a direct interest in the outcome of the litigation as plaintiff whereas the financier’s interest was indirect, being that of a creditor. Such commonality of interest is, in my view, not sufficient to attract common interest privilege.[31] And it is plain enough that Royce had no relevant interest in the outcome of the litigation. Thus, there could not have been sufficient community of interest between those parties to found the privilege contended.
[28][1981] Q.B. 223 at 243.
[29]At 243.
[30]Dr R. J. Desiatnik, Legal Professional Privilege in Australia (2nd ed, 2005) at 154.
[31]See, for example, Network Ten Ltd v. Capital Television Holdings Ltd (1995) 36 N.S.W.L.R. 275 at 283 per Giles, J.
Hence, as I have said, I would have dismissed the respondent’s claim based on common interest privilege.
Conclusion
In the circumstances, I would dismiss the appeal.
NEAVE, J.A.:
I gratefully adopt the statement of facts set out in Chernov, J.A.’s judgment. I agree with the conclusion that the claim of legal professional privilege made by Premier Building and Consulting Pty Ltd, based on the existence of a common interest between itself and its financiers, and between itself and Royce, should be rejected, for the reasons given by his Honour. I also agree with the view of the Chief Justice and Chernov, J.A., that copies of privileged documents provided by Baker & McKenzie to CFS or the other financiers or passed between CFS and its agents, are protected by privilege. I note however that my reasons for reaching that conclusion are different from those of their Honours.
I also differ from their Honours’ view that copies of privileged documents in the hands of Royce are protected by legal professional privilege. In my opinion, the appellant’s claim to inspect copies of documents produced to the court by Royce should be upheld, because the documents are not protected by legal professional privilege, or alternatively, the privilege was waived.
Issues
The appellant’s claim of legal professional privilege raises three separate issues. The first concerns the purpose of the relevant documents. Were they initially brought into existence for the dominant purpose of giving or obtaining legal advice?[32]
Were the original documents privileged?
[32]Esso Australia Resources Limited v. Commissioner of Taxation (1999) 201 C.L.R. 49 at 73.
A brief description of the contents of the relevant documents is set out in Chernov, J.A.’s judgment. In discussing the second and third issues below I have assumed that the documents were brought into existence for privileged purposes, though the only evidence on this issue was the affidavit of the respondent’s solicitor, Ms Moon, who was not cross-examined.
In Trade Practices Commission v. Sterling, Lockhart, J. noted the comments of Jenkins, L.J., that –
“The question whether the court should inspect the documents is one which is a matter for the discretion of the court, and primarily for the judge of first instance. Each case must depend on its own circumstances; but if, looking at the affidavit, the court finds that the claim to privilege is formally correct, and that the documents in respect of which it is made are sufficiently identified and are such that, prima facie, the claim to privilege would appear to be properly made in respect of them, then, in my judgment, the court should, generally speaking, accept the affidavit as sufficiently justifying the claim without going further and inspecting the documents.”[33]
Nevertheless, Lockhart, J. inspected the documents that were the subject of the claim for privilege, because there was some uncertainly as to whether they fell within the recognized categories of exclusion from inspection.
[33]Westminster Airways Limited v Kuwait Oil CoLimited [1951] 1 K.B. at 146, cited in Trade Practices Commission v. Sterling (1979) 36 F.L.R. 244 at 247.
In AWB Ltd v. Honourable Terence Rhoderic Hudson Cole (No 5)[34] Young, J. said that –
“The purpose for which a document is brought into existence is a question of fact that must be determined objectively. Evidence of the intention of the document’s maker, or of the person who authorised or procured it, is not necessarily conclusive[35].
…
The Court has power to examine documents over which legal professional privilege is claimed. Where there is a disputed claim, the High Court has said that the court should not be hesitant to exercise such a power.”[36]
[34][2006] FCA 1234.
[35]Ibid para. 44 (2).
[36]Ibid para. 44 (12).
The documents for which privilege was claimed included cost invoices passed on to the financiers and documents provided to Royce in relation to a press release and preparation for a public meeting. Memoranda of costs are not privileged unless they disclose the nature of instructions given by a client or the advice given by a solicitor.[37] Ms Moon’s affidavit of 25th May 2005 swears that these memoranda of costs contain descriptive time sheet narrations of work conducted by legal advisers working on the matter. Her affidavit of 14th June says that the documents provided to Royce included a “draft document with handwritten annotations by John Digby, Q.C. regarding preparation for a City of Moreland Public Meeting” and a Draft Media Release with marked up amendments by Anne Moon. In light of the description of these documents, it is questionable if they constitute legal advice, or public relations advice. As was recently noted by Young, J. in AWB Limited v. Honourable Terence Rhoderic Hudson Cole (No 5):[38]
“The concept of legal advice is fairly wide. It extends to professional advice as to what a party should prudently or sensibly do in the relevant legal context; but it does not extend to advice that is purely commercial or of a public relations character: Balabel v. Air India [1988] 1 Ch 317 (‘Balabel’) at 323 and 330; Nederlandse Reassurantie Groep Holding NV v. Bacon and Woodrow[1995] 1 All ER 976 (‘Nederlandse’) at 983; Three Rivers District Council v. Governor and Company of the Bank of England (No 6) [2005] 1 AC 610 (‘Three Rivers’) at 652–653 [43]–[44], 657–658 [59]–[60], 681 [114] and 683 [120]; Dalleagles Pty Ltd v. Australian Securities Commission (1991) 4 WAR 325 (‘Dalleagles’) at 332–333; DSE (Holdings) Pty Ltd v. Intertan Inc (2003) 135 FCR 151 (‘DSE’) at 161–173 [25]–[71]; and AWB v. Cole at [100]–[101].”
[37]Lake Cumbeline Pty Ltd v. Effem Foods Pty Ltd (1994) 126 A.L.R. 1
[38] [2006] FCA 1234 at 44.
The outline of submissions of the first, second and third appellants contended that
“The Spotless parties submitted below that this contentious assertion by a party’s solicitor carried negligible probative weight and ought not to be acted upon by the judge below.”
In my view it would have been preferable for the learned trial judge to have inspected the memoranda of costs and the documents provided to Royce which are mentioned above. However I agree with Warren, C.J. and Chernov, J.A. that the trial judge was not in error in relying on the evidence of Ms Moon to provide the basis for finding that all the documents attracted legal professional privilege.
Did privilege persist when copies of the documents were provided to third parties?
The second issue is whether, assuming that the documents were privileged as between Premier and its solicitors, this privilege protected copies of the documents provided to third parties, when the dominant purpose of passing on the copies or describing their contents may not have been to give or obtain legal advice. The questions which arise in this context are:
·whether privilege applied to copies of privileged documents provided to CFS and the other financiers by Premier’s solicitors, to inform them of work being done by the respondent’s lawyers for the purposes of the litigation?
·Whether privilege applied to copies of privileged documents given by one of the finance companies to another financier?
·Whether privilege applied to copies of privileged documents which were provided to Royce Pty Ltd, to enable it to counter negative publicity about the contamination of the land and the consequent litigation.
Was privilege waived?
The third issue is whether, assuming that the documents referred to in paragraph [46] were privileged, that privilege was waived when the documents were provided to the financiers and to Royce?
I address the second and third issues below.
Does legal professional privilege protect copies of privileged documents provided to a third party for a purpose other than obtaining legal advice?
Submissions
The main submission made by counsel for the appellants, Mr Middleton, Q.C., was that the communications made to and between the financiers and to Royce were not privileged, because they were not made for the dominant purpose of obtaining or giving legal advice. In Commissioner of Australian Federal Police v. Propend Finance Pty Ltd[39] the majority of the High Court[40] held that a copy of a document brought into existence for the purpose of obtaining legal advice or conducting litigation, is privileged, even though the original document is not privileged.[41]
[39](1997) 188 C.L.R. 501.
[40]Brennan, C.J. , Gaudron, McHugh, Gummow and Kirby, JJ.
[41]At the time the case applied the “sole purpose” test applied. This was replaced by the “dominant purpose” test in then expressed in Esso Australia Resources Ltd v. Commissioner of Taxation of the Commonwealth of Australia (1999) 201 C.L.R. 49.
This case, is, in a sense, the converse of the situation in Propend. On the basis of Propend, Mr Middleton submitted that privilege attaches to communications, rather than to documents. Since the communications and copy documents were not given to third parties for the dominant purpose of giving or obtaining legal advice, they were not privileged.
The respondents submitted that because the documents were originally created for the purpose of providing legal advice to Premier, copies of the documents were privileged unless and until privilege was waived by Premier. It was said that the appellants’ submission was inconsistent with the majority holding of the High Court in Mann v. Carnell[42]. In that case it was held that a document containing legal advice that was provided by an ACT Minister to a member of the ACT House of Representatives on a confidential basis remained privileged. It was contended that this case established that a privileged communication retained that status, unless there was waiver. The submission made on behalf of the appellants was said to reflect the dissenting view of McHugh J in Mann v. Carnell, that even if the original communication was privileged, privilege would not persist on communication to a third party, unless this communication was also made for a privileged purpose.[43]
[42](1999) 201 C.L.R. 1.
[43]Ibid at 32.
It is well established that privilege applies to certain communications between legal advisers, their clients and third parties, which are made for the dominant purpose of obtaining or giving legal advice. These include
·confidential communications between a legal adviser and a third party, for the dominant purpose of giving legal advice to a client or obtaining material for use in litigation; [44]
·documents which a third party creates at the request of a client, for the dominant purpose of the client obtaining legal advice (for example documents created by an accountant for a client as part of a process by which the client obtains legal advice). In Pratt Holdings Pty Ltd v. Commissioner of Taxation[45] it was held that privilege applied to such documents, even where the third party was not an agent of the person seeking the advice and even where the advice did not relate to the conduct of litigation.
[44]Trade Practices Commission v. Sterling (1979) 36 F.L.R. 244 at 245-6; Mitsubishi Electric Australia Pty Ltd v. Victorian Work Cover Authority (2002) 4 V.R. 332 at 335 [8].
[45]Pratt Holdings Pty Ltd v. Commissioner of Taxation (Cth) (2004) 136 F.C.R. 357.
The question which arises in this case is whether a copy or summary of a document which was created for the dominant purpose of giving legal advice, and is then communicated to a third party for another purpose, remains privileged, unless privilege is waived. Direct authority on this issue is sparse, although many cases have assumed that privilege applies to documents given to or communications made to a third party, unless it has been waived.[46] Indeed, the simple statement of the principle that “a document will attract privilege if it is brought into existence for the dominant purpose of giving or obtaining legal advice” assumes that its privileged quality is determined at the date of its creation.
[46]See for example Esso Australia Resources Limited v. Commissioner of Taxation (1999) 201 C.L.R. 49 at 64-65; Pratt Holdings Pty Ltd v. Commissioner of Taxation (Cth) (2004) 136 F.C.R. 357. (See for example the treatment of the category 4 documents at 375 [62]).
In the English case of Bank of Nova Scotia v. Hellenic Mutual War Risks Association (Bermuda) Pty Ltd Saville, J. said that –
“there was no good or valid reason for the suggestion that the confidence which it is accepted attaches to the lawyer-client communication itself, should somehow be lost once the advice given is put to the commercial use for which it is sought in the first place.”[47]
Saville, J. thought that such a proposition would undermine the policy of protecting lawyer-client communications.
[47][1992] 2 Lloyds Rep 540 at 540-541.
Similar concerns were expressed by Gillard, J. in Australian Hospital Care Pty Ltd v. Duggan, where his Honour said that
“Privilege is concerned with communication whether oral or in documentary form. The person who has a document supplied to him by his lawyer in circumstances which makes the communication privileged from production or disclosure is entitled to use the document for his own legitimate purpose. If he makes a copy this does not lose the protection. To hold otherwise would mean emasculating the true object of the rule. In my opinion this conclusion accords with practical common sense giving effect to the policy underlying the privilege.”[48]
[48][1999] VSC 96 at [53].
For the reasons given below, I disagree with that view.
The respondents submitted that the position advanced by the appellants was inconsistent with Mann v. Carnell[49] where
“the majority did not enquire as to the purpose for the copy being brought into existence but rather considered the original communication.”
[49][1999] 201 C.L.R. 1.
However both the argument in that case and the majority judgment dealt mainly with the applicability of the Evidence Act 1995 (Cth) ss.118 and 122 to pre-trial processes and with whether privilege had been waived.[50] Having found that the Full Court had erred in applying the Evidence Act principles, the majority decided the
case on the basis of waiver.[51] The majority said that the reasoning in Goldberg v. Ng[52] was inconsistent with the proposition “that any voluntary disclosure to a third party necessarily waives privilege”.[53] However this statement relates to the operation of the waiver principle, rather than to the question whether a third party communication must itself be made for the purposes of obtaining legal advice if it is to be privileged.
[50]Gleeson, C.J., Gaudron, Gummow, and Callinan, JJ.
[51]See the comments on this point in Rickard Constructions Pty Ltd v. Rickard Hails Moretti Pty Ltd [2006] NSWSC 234.
[52](1995) 185 C.L.R. 83.
[53][1999] 201 C.L.R. 1 at 14 per Gleeson, C.J., Gaudron, Gummow, and Callinan, JJ.
Further, some parts of the judgment suggest that this should not be regarded as a third party communication case at all. As the majority judgment noted
“It does less than justice to the [Chief Minister’s] position to describe what occurred in the present case as disclosure to a third party. The privilege was that of the body politic, the Australian Capital Territory. The head of the Territory’s Executive, the Chief Minister, in response to a question raised by a member of the Territory’s Legislative Assembly as to the reasonableness of the conduct of the Territory in relation to certain litigation, gave the member, confidentially, access to legal advice that had been given to the Territory, and on the basis of which it had acted. Although ‘disclosure to a third party’ may be a convenient rubric under which to discuss many problems of this nature, it represents, at the least, an over-simplification of the circumstances of the present case.”[54]
[54] (1999) 201 C.L.R. 1 at 14-15.
For these reasons I do not think that either Goldberg v. Ng[55] or Mann v. Carnell[56] are clear authority for the proposition that a copy of a privileged document which is passed on to a third party for a purpose which is unrelated to the provision of legal advice, remains privileged, unless privilege has been waived.
[55](1995) 185 C.L.R. 83.
[56](1999) 201 C.L.R. 1.
If I am correct in this view it is necessary to consider whether the rationale of legal professional privilege requires that it applies to copies of privileged documents or communications of the content of those documents to third parties, for purposes other than obtaining legal advice.
What is the rationale of legal professional privilege?
Legal professional privilege is a “fundamental and general principle of the common law”[57] rather than merely a rule of evidence. In Grant v. Downs[58] its rationale was expressed as follows;
“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.”
[57]Baker v. Campbell, (1983) 153 C.L.R. 52, at 117 per Deane, J.
[58](1976) 135 C.L.R. 674 at 685, per Stephen, Mason and Murphy, JJ.
In Waterfordv.The Commonwealth of Australia[59] the High Court acknowledged that –
“Legal professional privilege is itself the product of a balancing exercise between competing public interests whereby, subject to the well-recognised crime or fraud exception (cf Reg. v. Bell; Ex parte Lees[60] the public interest in “the perfect administration of justice” (per Earl of Halsbury LC in Bullivant v. Attorney-General (Vic)[61]) is accorded paramountcy over the public interest that requires, in the interests of a fair trial, the admission in evidence of all relevant documentary evidence.”[62]
The benefits of free and uninhibited access to candid legal advice are generally regarded as outweighing the competing benefit of having all relevant and probative material available to the Court to facilitate the trial process.
[59](1987) 163 C.L.R. 54.
[60](1980) 146 CLR 141; 30 ALR 489.
[61][1901] AC 196 at 200.
[62] (1987) 163 C.L.R. 54, at 64 – 65, per Mason and Wilson, JJ.
In my opinion it is not necessary to accord legal professional privilege to copies of documents containing or related to legal advice which are communicated to third parties for unrelated purposes, in order to encourage full and frank disclosure by clients to their lawyers. A person will be able to pass on legal advice to a third party who is providing expert advice which is relevant to the provision of the legal advice because privilege will cover those communications.[63] A client is not likely to be deterred from communicating frankly with their lawyer because in the future the client may wish to pass on the information to a third party for a reason other than obtaining legal advice. If he or she does not want the contents of the advice to become available the remedy lies in his or her own hands – details of privileged communications should not be provided to third parties.
[63]Pratt Holdings Pty Ltd v. Commissioner of Taxation (Cth) (2004) 136 F.C.R. 357 at [62].
The mere fact that the communication was confidential is not sufficient to justify extending privilege to it. As the High Court acknowledged in Esso Australia Resources Ltd v. Commissioner of Taxation of the Commonwealth of Australia[64]:
“In the ordinary course of events, citizens engage in many confidential communications, including communications with professional advisers, which are not protected from compulsory disclosure.”
[64] (1999) 201 C.L.R. 49 at 64.
Although the precise point was not considered in Commissioner of Australian Federal Police v. Propend Finance Pty Ltd, the view I have taken is consistent with the approach of the majority. Gaudron, J. said that one reason for rejecting the view that a copy document could not be privileged unless privilege applied to the original was
“that legal professional privilege does not protect documents, as such, but protects communications between lawyer and client.”[65]
[65](1996) 188 C.L.R. 501 at 543.
Similarly, McHugh, J. said that that
“Legal professional privilege is concerned with communications, either oral, written or recorded, and not with documents per se.”[66]
[66]Ibid at 552. See also Gummow, J. at 569, and Kirby, J. at 585.
It follows that a communication which is made between a lawyer and a client and re-communicated to a third party or a copy of a document containing legal advice which is passed on to a third party should not be privileged unless the new communication to the third party is for the dominant purpose of obtaining or giving legal advice. I note that the alternative approach has the deficiency of maintaining the protection of privilege regardless of to whom or for what purposes the content of legal advice was communicated, unless privilege had been waived. This seems to me to go well beyond the policy basis for recognition of legal professional privilege.
Application of the above principles to the communications between Premier’s solicitors and financiers and between financiers
For the reasons given above, I proceed on the basis that the documents provided to the financiers were privileged when they were created. Premier was indebted to CFS, which made loans to Premier to support the building development and the litigation which followed. Chernov, J.A.’s judgment describes the relationship between CFS, the mortgage broker Balmain and the administrator of mortgage finance, AMAL. According to Ms Moon’s affidavit of 25th May 2005, copies of documents which were privileged were made available by the solicitors to the financiers and by one financier to other financiers “for the purpose of keeping them up to date on the status of the proceedings and any views of its legal advisers as to the prospects of the case.”
I have indicated that I would not regard copies of documents provided by Premier’s solicitors to the financiers, or provided by one financier to another, as privileged, unless the dominant purpose for providing these documents was for Premier to obtain legal advice or to support their litigation. Assuming that the purpose of the communication was to encourage the financiers to continue to provide funds to cover legal costs, can it be said that the dominant purpose of providing the documents was to enable Premier to obtain legal advice or to support their litigation?
The respondents relied on Rickard Constructions Pty Ltd v. Rickard Hails Moretti Pty Ltd[67] as authority for the proposition that a communication between a party and its financier may in fact be a confidential communication “for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding.”[68] That case was concerned with the interpretation of the legal professional privilege provisions in the Evidence Act 1995 (N.S.W.) ss.118 and 119, rather than with common law privilege.
[67][2006] NSWSC 234.
[68]Under Evidence Act 1995 (N.S.W.) s.119.
The funder was invited to attend meetings between the client and its lawyers and received copies of various documents relating to those meetings (for example agendas and minutes), documents relating to the legal proceedings and documents relating to costs. The funder, which did not have a solicitor-client relationship with the lawyers, claimed legal professional privilege in relation to these documents. The evidence was that the funder was kept informed of the progress of the litigation, so that it would exercise its discretion to continue to make funds available.
Bergin, J. held that confidential communications made to the funder were protected by privilege because they were made for the dominant purpose of the plaintiff ““being provided” with professional legal services” in the context of litigation.[69] Although the decision is based on s.119 of the Evidence Act 1995 (N.S.W.), the reasoning may be apposite to the position of the financiers in this case. Bergin, J. said
“[T]he confidential communications…are inextricably linked to the nature of the professional legal services being provided to the client. Their dominant purpose was to ensure the overall capacity of the plaintiff to have funding and to ensure that such funding would be forthcoming for the continued funding of the litigation. That seems to me to fall within the description of a dominant purpose of the client “being provided” with professional legal services.”[70]
[69][2006] NSWSC 234 at [59].
[70]Ibid at [59].
By analogous reasoning I would take the view that privilege applies to copies of documents which were originally privileged and which were sent to CFS to support the funding arrangements for the litigation. In the absence of evidence as to the nature of the documents or the precise reasons why they were handed on, I am prepared to assume, without deciding, that privileged documents passed on by CFS to its agents Balmain and AMAL are protected by privilege for similar reasons.
Chernov, J.A. reaches the same conclusion by a different route. In his view it was not inconsistent with the maintenance of legal professional privilege for copies of privileged documents to be provided by Premier’s solicitors to the financiers on a confidential basis. Hence Premier did not waive its privilege in relation to these documents. According to my reasoning the copies were privileged in the hands of CFS and its agents, because the copies were provided for the dominant purpose of supporting the litigation.
In the case of Royce however, copies of the documents were not provided for the dominant purpose of obtaining legal advice by Premier, or for supporting its litigation, but to assist Royce to run an effective public relations campaign. It follows from my view that copies of these documents were not privileged in the hands of Royce. In case I am wrong however, and the privilege continued to apply to the copies in the hands of Royce unless it was waived, I go on to consider whether the provision of these documents to the Royce waived Premier’s legal professional privilege.
Waiver
Circumstances in which documents were disclosed to Royce
According to the affidavit sworn by Ms Moon on 14 June 2005 “Royce were engaged by the plaintiff as business or communication strategists once the matter regarding the contamination at 225 and 227-231 Barkly St Brunswick gained public interest and media coverage.” The affidavit also says that “The information was disseminated to persons with an obligation to keep the Plaintiff’s affairs confidential. It was not intended that any legal professional privilege be waived.”
The learned judge below found that the privilege had not been waived because “the privileged material was passed to Royce in circumstances where it was confidential and for use for a limited purpose associated with the overcoming or mitigation of the impact on Premier of the contamination problem on the Premier land.” Warren, C.J. and Chernov, J.A. have found that his Honour did not err in reaching that conclusion. I take a different view.
Principles relating to waiver
In Mann v. Carnell[71] Gleeson C.J. , Gaudron, Gummow and Callinan, JJ. said
“Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. When an affirmative answer is given to such a question, it is sometimes said that waiver is ‘imputed by operation of law’. This means that the law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the subjective intention of the party who has lost the privilege….What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive between the conduct of the client and maintenance of confidentiality; not some overriding principle of fairness operating at large.”[72]
[71](1999) 201 C.L.R. 1.
[72]At 13 [29].
The onus of establishing privilege normally lies on the party asserting it.[73] The only evidence as to the circumstances in which Royce came to be in possession of the privileged communications is Ms Moon’s affidavit referred to above.
[73]AWB Limited v. Honourable Terence Rhoderic Hudson Cole (No. 5) [2006] FCA 1234 at [44].
What will objectively be considered to be ‘inconsistent’ has been amplified in subsequent cases, and depends in part, upon the context in which the disclosure is made. For example, in Australian Rugby Union Ltd v. Hospitality Group Pty Ltd,[74] Sackville, J. said that Goldberg v. Ng[75] had decided that disclosure of a privileged communication for a limited purpose and subject to a confidentiality requirement may not amount to an express or intentional waiver of privilege at common law. Even if a limited confidential communication does not amount to an express waiver, the circumstances of the case may be such as to impute a waiver of privilege.[76]
[74](1999) 165 A.L.R. 253.
[75](1995) 185 C.L.R. 83.
[76](1999) 165 A.L.R. 253 at 262-263 [42]-[43]. In that case, privilege was held not to be waived by virtue of the fact that the parties attending a meeting between the client and their solicitor were under an implied obligation to maintain confidentiality at that meeting.
In Network Ten Pty Ltd v. Capital Television Ltd[77] Capital provided a letter of legal advice to a company with which it was negotiating to sell its shares and later to a Bank which was considering whether it should finance the purchase. Although the letter forwarding the advice to the purchaser company did not expressly seek to preserve confidentiality it requested that the purchaser’s solicitors should telephone to discuss what parts of the material their client might wish to disclose to the bank. A few days after the letter was sent the prospective purchaser and the bank gave undertakings to keep the letter confidential, to limit its disclosure to no more than two solicitors and to use it for no other purposes other than advising the bank in relation to the purchase.[78]
[77](1995) 36 N.S.W.L.R. 275.
[78]Ibid at 277.
In later legal proceedings, Network Ten sought access to the letter in the hands of Capital and the Bank. Giles, J. found that privilege had not been waived, either because of the limited and specific purpose and specific content of the disclosure or because there was no unfairness in maintaining the privilege.[79]
[79]Ibid at 286.
This is not a case like Goldberg v. Ng[80] where the confidential disclosure was held to waive privilege, because the party disclosing the document had disclosed it to gain a forensic advantage and it would be unfair and misleading to permit the party making the disclosure to withhold the document.
[80](1995) 185 C.L.R. 83.
However the cases discussed above make it clear that the fact that a third party who has been given privileged documents has a commercially confidential relationship with the person entitled to that privilege does not necessarily prevent waiver occurring. It is necessary to show that the documents were provided to the third party on a confidential basis for a limited or specific purpose.
Conclusion
Was there sufficient evidence to support the finding of the learned judge below that the disclosure of documents to Royce, for the limited purpose of running a public relations campaign for Premier, did not waive privilege?
In my view there was no evidence which justified this finding. Ms Moon did not swear that the documents themselves were provided on a confidential basis but simply asserted the existence of a general confidential relationship between Premier and Royce. There was no evidence that the documents were provided to Royce on a confidential basis for a limited and specific purpose. They were not accompanied by a letter, fax or email requiring it to limit the dissemination of the documents provided to it, or to return copies when they were no longer needed, as was the case in Network Ten Ltd v. Capital Television Ltd.[81] I would therefore reverse his Honour’s decision that the documents provided to Royce were protected from disclosure by legal professional privilege.
[81](1995) 36 N.S.W.L.R. 275.
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