State Bank of South Australia v Smoothdale No 2 Ltd and Security Pacific Overseas Investment Corporation No. SCGRG 91/2884 Judgment No. 5339 Number of Pages 12 Evidence Facts Excluded from Proof

[1995] SASC 5339

COURT IN THE FULL COURT OF THE SUPREME COURT OF SOUTH AUSTRALIA DOYLE CJ(1) PRIOR(2) AND WILLIAMS(3) JJ

CWDS
Evidence - facts excluded from proof - on grounds of privilege - Legal professional privilege - plaintiff's privileged legal advice - disclosed to plaintiff's insurer - letter from insurer to plaintiff's insurance broker discussing legal advice - whether document might be privileged because it records legal advice - whether privilege waived through disclosure to others - remitted to trial judge for determination. State Bank of South Australia v Smoothdale No.2 Ltd (SA Supreme Court, Full Court, Number 5070 unreported, available on SCALE); Goldberg v Ng (1994) 33 NSWLR 639; Harbour Inn Seafoods Ltd v Switzerland General Insurance Co Ltd (1990) 2 NZLR 381, applied.

Evidence - facts excluded from proof - on grounds of privilege - Privilege in aid of settlement - statutory codification, s67c Evidence Act (SA) - exception where dispute has been settled - exception refers to settlement of the dispute which generated the communication - determination of trial judge upheld. Rush and Tompkins Ltd v Greater London Council (1989) AC 1280, discussed.

HRNG ADELAIDE, 11 October 1995 #DATE 13:12:1995 #ADD 15:1:1996

Counsel for appellant:     Mr W J N Wells QC with
   Mr T Baldock

Solicitors for appellant:    Thomsons

Counsel for respondents:     Mr D Quick QC with Mr F Kunc

Solicitors for respondents: Mouldens

ORDER
Appeal dismissed.

JUDGE1 DOYLE CJ This is an appeal against a decision of a Judge rejecting a claim by a plaintiff in an action in this Court that certain documents which it had discovered were privileged.

2. There was a claim of privilege in respect of one document on the grounds of legal professional privilege, privilege in aid of settlement and common interest privilege. In his decision the Judge refers only to legal professional privilege.

3. There was also a claim of privilege in respect of a group of documents. These documents were described as communications between solicitors acting for certain persons relating to negotiations of proposed terms of settlement of litigation and marked "without prejudice". In other words, it was claimed that these were documents containing admissions made by a party in the course of negotiations to settle a dispute.

4. The action in this Court in which the claim of privilege was made is an action in which the plaintiff sues the defendants for damages arising out of the purchase by the plaintiff from the first defendant of all of the shares of a company. After the acquisition of the shares by the plaintiff, the company changed its name to SBSANZ (there is no need to expand the acronym). I will refer throughout to the company by that name.

5. After the plaintiff acquired the shares in SBSANZ that company was sued in two different actions by certain companies in respect of dealings which they had had with it before the acquisition of the shares. Both of these actions were settled on the basis that SBSANZ would make certain payments. The plaintiff discharged SBSANZ's liability to make those payments.

6. SBSANZ sought indemnity from its insurer - FAI - in respect of its liability in the actions referred to. This led to litigation against FAI, to which action the plaintiff was a party. That litigation was ultimately settled.

7. The first item in respect of which privilege was claimed is a letter from FAI to the insurance broker for SBSANZ relating to the claim made against FAI for indemnity. Apparently the letter discusses legal advice provided to the plaintiff with a view to obtaining indemnity from FAI. My understanding is that the letter related not just to policy points, but to aspects of the claim against SBSANZ. My understanding is that at some time prior to the writing of this letter the plaintiff must have disclosed to FAI (either directly or through its broker) some aspects of the legal advice which the plaintiff had received. It is easy to understand that in this context FAI, in responding to arguments advanced by the plaintiff, might allude to the legal advice given to the plaintiff and disclosed to FAI.

8. It therefore can be seen that in relation to the first item the claim of privilege is made in unusual circumstances.

9. The group of documents in respect of which a claim of privilege in aid of settlement was made comprised communications between the solicitors for one of the parties which took action against SBSANZ and the solicitors for SBSANZ. These were "without prejudice" communications relating to a proposed settlement of that claim. As already mentioned, there was ultimately a settlement of the claim. Again, as already mentioned, this was a settlement in respect of which the plaintiff met the liabilities of SBSANZ.

10. In the Supreme Court proceedings in which the claim of privilege is made the plaintiff claims, among other things, to recover from the defendants the amounts which it paid out in respect of SBSANZ's compromises. The first defendant was the vendor to the plaintiff of the shares in SBSANZ. The plaintiff claims to recover the amounts which it paid out in respect of SBSANZ's compromises under the share sale agreement. The plaintiff also claims that before the purchase of the shares there was misleading conduct by employees of SBSANZ, for which misleading conduct the defendants are liable and that the payments which the plaintiff made resulted from that misleading conduct. It seems that certain issues in the proceedings brought against SBSANZ may arise in the proceedings between the plaintiff and the defendants. Just how this will arise is not completely clear, but for present purposes I do not think that matters.

11. I have set the facts out at some length to explain the unusual circumstances in which the two claims of privilege are made. But, as will emerge, it is my opinion that the appeal can be disposed of on the basis of the rather general statement of facts which I have set out, and without needing to achieve complete precision.

THE FIRST DOCUMENT
12. His Honour said that this document "does not come within any of the categories which attract legal professional privilege."

13. There is no need to cite authority for the proposition that a confidential communication of legal advice by a solicitor to a client is subject to legal professional privilege, and may not be given in evidence or otherwise disclosed without the client's consent.

14. The letter from FAI to the insurance broker for SBSANZ apparently records such advice or some part of it. As a communication from FAI to the insurance broker the letter would not ordinarily attract legal professional privilege. That seems to have been the approach which His Honour took.

15. However, in my opinion there is another aspect to the letter which required consideration. It is well established that a written record, by the client or employees of the client, of confidential legal advice provided by a solicitor to a client will itself be privileged: Trade Practices Commission v Sterling (1978) 36 FLR 244 at 246; Standard Chartered Bank of Australia Ltd v Antico (1995) 36 NSWLR 87. It would be to undermine the privilege to hold that the communication of advice by solicitor to client was privileged, but that a written record by the client of that advice was not privileged. In my opinion, on the same basis it must be acknowledged that there might be other documents recording confidential legal advice provided by a solicitor to a client which, to the extent that they record such advice, will likewise be subject to privilege. Such documents might be privileged not in their own right, that is, not because the document is itself a communication for the sole purpose of obtaining legal advice, but simply because the document does and to the extent that it does record confidential legal advice the communication of which attracts a claim of privilege.

16. As I have already said, it seems that in the present case legal advice given to SBSANZ must have been communicated by SBSANZ to its broker and thence to FAI or directly to FAI. In my opinion the question which must be addressed is the question of whether that communication constituted a waiver of the privilege which would otherwise attach to the record of the advice received by SBSANZ from its solicitor, or whether the communication was made to the broker or to FAI under circumstances such that the privilege continued to attach to the advice communicated to SBSANZ. If the communication of the legal advice to FAI did not constitute a waiver of the privilege which otherwise attached to it, there is no reason why its repetition in a letter from FAI to SBSANZ's insurance broker should be regarded as constituting a waiver of the privilege. It is not easy to see how FAI would have the capacity to waive a right to claim privilege vested in SBSANZ. Nor, as a matter of common sense, is it easy to see why, if the communication to FAI did not constitute a waiver of the privilege, a repetition of the same material in correspondence from FAI back to SBSANZ's insurance broker should constitute a waiver.

17. It therefore seems to me that the critical question, which the Judge appears to have failed to address, is whether the communication to FAI (I will for simplicity's sake simply treat it as a communication to FAI) amounted to a waiver of the privilege which would otherwise attach to legal advice communicated to SBSANZ. Or, to put it a little differently, the question is whether the communication of the legal advice to FAI was a partial or limited waiver of the privilege, the privilege being waived only in relation to FAI.

18. It has been held by this Court that there may be a waiver of legal professional privilege which is partial or limited only: State Bank of South Australia v Smoothdale No.2 Limited (Full Court of the Supreme Court of SA, 2nd June 1995, number 5070, unreported, available on SCALE). In that case, in a judgment concurred in by the other two members of the Court, King CJ said, after referring to a number of decisions bearing on the point:
    "I think that these authorities clearly establish that
    waiver of privilege may be limited to a specific situation
    or purpose."

19. It was not argued that this decision was wrong, and accordingly it is a decision which I should follow and apply.

20. In reaching his decision King CJ relied upon a decision of the NSW Court of Appeal in Goldberg and Ors v Ng and Ors (1994) 33 NSWLR 639. For present purposes it suffices to say that in that case proceedings were brought against a solicitor by the solicitor's former clients, who also complained to the Law Society of New South Wales about the solicitor's conduct. The Law Society undertook an investigation into the conduct of the solicitor. In the course of that investigation the solicitor provided to the Law Society certain documents prepared by the solicitor solely for the purpose of obtaining legal advice in relation to the complaint. Accordingly, legal professional privilege attached to those documents and the privilege belonged to the solicitor. In due course the Society dismissed the complaint. In the civil proceedings a subpoena was issued to the Law Society to produce the documents which the solicitor had provided to it, and the question then arose of whether, despite the production to the Society, the documents remained subject to legal professional privilege at the instance of the solicitor. The Court of Appeal held by a majority that under the circumstances there had been a waiver of the privilege. The essence of the majority decision was that considerations of fairness required the privilege to be regarded as waived because the solicitor, by his deliberate disclosure, had used the privileged material to his advantage and to the disadvantage of the other party to the litigation. That aspect of the decision need not be considered here. In his dissenting judgment on this point Kirby P accepted the concept of limited waiver. He said (at 655):
    "That our judicial system of law accords paramountcy to the
    general principle that a person is entitled to have
    preserved the confidentiality of communications properly
    falling within the doctrine of legal professional privilege
    is clear. Ordinarily, such is the primacy of that right,
    that it will not be subordinated even to promote the search
    for justice or truth in a particular case. It is not the
    case, as was submitted by the Ngs, that the basis upon which
    legal professional privilege is founded prohibits the
    application and development of a concept of limited waiver
    as enunciated in the English cases of British Coal, Goldman
    and Downey. On the contrary, the concept of a limited
    waiver is consistent, and indeed, it promotes, the
    maintenance of the fundamental right of a person to maintain
    the confidentiality of relevant communications made in the
    course of or in anticipation of litigation. It does so by
    allowing communications to be protected from disclosure as
    against a litigant party (in the proceedings for which the
    communications were created) notwithstanding disclosure to a
    third party for a specific purpose and limited purpose in a
    specific context."

21. In his judgment (at 665) Mahoney JA did not deal in express terms with the concept of limited waiver, but there is nothing in his judgment inconsistent with that concept. Clarke JA rejected the notion that a party might limit the extent of the waiver of its privilege, and held that the English cases referred to by Kirby P did not so decide. But he went on to say (at 676):
    "In my opinion, British Coal Corporation v Dennis Rye Ltd
    (No.2) stands as authority for the proposition that the
    particular conduct of the plaintiff did not constitute a
    waiver of the privilege which the plaintiff enjoyed in the
    relevant documents and simply demonstrates the fact that
    there is no universal rule that the disclosure of documents
    produced for the sole purpose of seeking legal advice or
    litigation to a stranger to that litigation constitutes a
    waiver of the privilege in that document."

22. So, in other words, he reached the same result by holding that the disclosure of privileged material did not necessarily constitute a waiver of the privilege which would otherwise attach. See also the discussion of this topic, and of the judgments to which I have referred, in Network Ten Ltd v Capital Television Holdings Ltd (1995) 36 NSWLR 275.

23. A similar approach was taken in Harbour Inn Seafoods Ltd v Switzerland General Insurance Co Ltd (1990) 2 NZLR 381. The case has some similarities to the present case. In that case the plaintiff claimed legal professional privilege in respect of certain documents held by its insurance broker, the broker not being the agent of the defendant in the action. It was common ground that the documents had originally been privileged, but the defendant claimed that the privilege had been waived by the plaintiff by disclosing the documents to the broker. At 384 Henry J said:
    "The restricted nature of the disclosure to (the broker),
    which I infer was deliberate and not mistaken, was not in
    the circumstances of this case an effective disclosure to
    any person including the defendant other than (the broker),
    and there has been no use made by the plaintiff of the
    documents either in whole or in part which would render it
    in any way unfair for the immunity to continue
    (Attorney-General for the Northern Territory v Maurice
(1986) 69 ALR 31). The disclosure consequently does
    not operate as a waiver in favour of the defendant,
    and the privilege maintains."

24. Bound as we are by the earlier decision of this Court to which I have referred, I would hold that disclosure by the plaintiff to FAI of legal advice given to the plaintiff in relation to proceedings against SBSANZ, assuming that advice originally to have been privileged, did not necessarily amount to a waiver of the privilege. I would likewise hold that a repetition of or reference to that same advice in a communication from FAI to the plaintiff's insurance broker would not amount to a waiver or make it unfair for the plaintiff to continue to assert the privilege. This Court is not in a position to decide whether or not the communication of the legal advice to FAI constituted a waiver of the privilege which would otherwise attach, or would make it unfair for the plaintiff to continue to assert the privilege. The relevant facts are not before the Court. The principles are set out in the cases referred to. It should be noted also that it is quite possible that if a claim of privilege can be maintained, it can be maintained only in respect of part of the relevant letter.

25. In my opinion the appeal should be allowed to the extent of quashing the order directing production of the document numbered T113024 and an order should be made remitting to a Judge of this Court for further consideration the application for an order that the plaintiff produce to the defendants the document referred to.

26. Privilege was claimed in respect of this document on certain other grounds. It is not clear whether they were dealt with by His Honour. That matter can be dealt with on the further hearing.

27. After I had prepared these reasons, the High Court delivered its judgment in Goldberg v Ng (3 November 1995, unreported).

28. The Court, by a majority (Deane, Dawson and Gaudron JJ, Toohey and Gummow JJ dissenting) dismissed the appeal against the decision that Mr Goldberg had waived the legal professional privilege which originally attached to the documents in question.

29. The majority accepted that there had been no express or intentional general waiver by Mr Goldberg of legal professional privilege (at p9). They also accepted that waiver might be imputed by operation of law as a result of an act or omission. They said (at p10):
    "Ordinarily, that act or omission will involve or relate to
    a limited actual or purported disclosure of contents of
    privileged material. When such act or omission of the
    person entitled to the benefit of the privilege gives rise
    to a question of imputed waiver, the governing consideration
    is whether `fairness requires that his privilege shall cease
    whether he intended that result or not' (footnote omitted).
    That does not mean, however, that an imputed waiver must
    completely destroy the privilege. Like an express waiver,
    it can be limited so that it applies only in relation to
    particular persons, materials or purposes."

30. They concluded that in the particular circumstances of the case ordinary notions of fairness led to the conclusion that the limited disclosure to the Law Society required an imputed waiver of Mr Goldberg's legal professional privilege.

31. Toohey J (diss) also proceeded on the basis that there had not been an express waiver of the privilege generally (at p22). He accepted that there might be a limited waiver of legal professional privilege (at p25). Fairness was relevant in deciding whether a limited waiver gave rise to an imputed (and general) waiver. He said (at p25):
    "Where some uncertainty has arisen is the point at which
    ideas of fairness or unfairness intrude. Where the issue is
    one of limited waiver considerations of fairness do not
    arise. The fairness is relevant in determining whether
    there has been imputed waiver; the concept of limited waiver
    is an exception to express general waiver." Gummow J agreed (at pp34-35) with the law as stated by Toohey J.

32. It can be seen that all members of the Court accepted the principle that there could be a limited waiver of legal professional privilege. They all accepted that considerations of fairness might require that what the holder of the privilege intended to be a limited waiver be treated as a general waiver. They differed only in the application of these principles of the facts.

33. In my opinion there is nothing in the reasoning of the High Court which is inconsistent with the conclusion which I have reached.

34. It remains necessary to determine, when the matter has been remitted, whether the disclosure to FAI was intended as and was a limited waiver of legal professional privilege, and, if it was, whether considerations of fairness nevertheless require that the privilege has ceased, whether that was intended or not.

THE GROUP OF DOCUMENTS
35. The issue here is whether, as His Honour decided, the privilege in aid of settlement which originally attached to this group of documents ended when the claim against SBSANZ was settled. His Honour held that the entitlement to claim privilege did end or terminate when that happened. The basis of his decision was s67c(2)(e) of the Evidence Act 1929 (SA). It is necessary to set out the whole of s67c. It provides as follows:
    "67c.(1) Subject to this section, evidence of a
    communication made in connection with an attempt to
    negotiate the settlement of a civil dispute, or of a
    document prepared in connection with such an attempt, is not
    admissible in any civil or criminal proceedings.

(2) Such evidence is, however, admissible if -
    (a) the parties to the dispute consent; or
    (b) the substance of the evidence has been disclosed with
    the express or implied consent of the parties to the
    dispute; or
    (c) the substance of the evidence has been partly disclosed
    with the express or implied consent of the parties to the
    dispute, and full disclosure of the evidence is reasonably
    necessary to -
     (i) enable a proper understanding of the other evidence
     that has already been adduced; or
     (ii) avoid unfairness to any of the parties to the
     dispute; or
    (d) the communication or document included a statement to
    the effect that it was not to be treated as confidential; or
    (e) the communication or document relates to an issue in
    dispute and the dispute, so far as it relates to that issue,
    has been settled or determined; or
    (f) the evidence tends to contradict or to qualify evidence
    that has already been admitted about the course of an
    attempt to settle the dispute; or
    (g) the making of the communication, or the preparation of
    the document, affects the rights of a party to the dispute;
    or
    (h) the communication was made, or the document was
    prepared, in furtherance of -
     (i) the commission of a fraud or an offence; or
     (ii) the doing of an act that renders a person liable to
     a civil penalty; or
     (iii) the abuse of a statutory power.

(3) Subsection (1) does not apply to parts of a document
    that do not concern attempts to negotiate a settlement of a
    dispute, if it would not be misleading to adduce evidence of
    only those parts of the document."

36. Putting things simply, and, I hope, without over simplifying things, the defendants argue that the communications in questions related to an issue in dispute in the action against SBSANZ, that the dispute so far as it related to that issue has been settled or determined, and that accordingly evidence of the communications was admissible and a claim of privilege could not be made. On the other hand, the plaintiff argues that sub-paragraph (e) refers to an issue in the present case between the plaintiff and the defendants, that the communications relate to a matter that is an issue in dispute in these proceedings and that because the dispute, so far as it relates to that issue has not been settled or determined, evidence of the communications is not admissible in the present civil proceedings.

37. Once the rival contentions are stated, one can see the ambiguity in sub-paragraph (e).

38. I think that it will suffice if I summarise the plaintiff's argument in support of its contention. The argument went as follows. First, the policy underlying privilege in aid of settlement is to encourage the settlement of disputes by frank negotiations between parties in dispute. This is in the public interest. Such negotiations are encouraged by making available a privilege which will protect a party from the use against the party of concessions made in the course of such negotiations. I accept that submission.

39. The plaintiff argued that in some situations frank negotiations will be discouraged if a party to the negotiations knows that they may be disclosed to others after an agreement has been reached. I accept that submission as a matter of fact, but note that the extent to which the privilege in aid of settlement is available after agreement has been reached is not, as a matter of law, altogether clear.

40. Next, the plaintiff argued that at common law the privilege in aid of settlement was in certain circumstances available notwithstanding the reaching of agreement between the negotiating parties and after the reaching of such agreement. The plaintiff relied upon the decision of the House of Lords in Rush and Tompkins Ltd v Greater London Council and Anor (1989) AC 1280. I refer to the following passages from the speech of Lord Griffiths. First (at 1301):
    "I would therefore hold that as a general rule the 'without
    prejudice' rule renders inadmissible in any subsequent
    litigation connected with the same subject matter proof of
    any admissions made in a genuine attempt to reach a
    settlement. It of course goes without saying that
    admissions made to reach settlement with a different party
    within the same litigation are also inadmissible whether or
    not settlement was reached with that party."

41. I refer also to the following passage from that speech (at 1305):
    "I have come to the conclusion that the wiser course is to
    protect 'without prejudice' communications between parties
    to litigation from production to other parties in the same
    litigation."

42. As far as I am aware this statement of the law has not received any authoritative consideration in Australia. I must say that to me it makes a lot of sense, but there are important countervailing interests and policies to be balanced here, and without full argument I would not want to decide whether or not what Lord Griffiths said represented the law of Australia. It is not necessary to decide that at present, although I refer in passing to the reliance placed upon Lord Griffith's speech by Hill J in Quad Consulting Pty Ltd v David Bleakley and Associates Pty Ltd (1991) 27 FCR 86 at 91-93. For present purposes it suffices to say that it is unclear whether or not the common law would allow the plaintiff to maintain a claim of privilege in aid of settlement in the present circumstances, but that it has House of Lords authority in its support.

43. The next step in the plaintiff's argument was that s67c of the EvidenceAct is based upon a Green Paper issued by the South Australian Government which Green Paper made the point that an assurance of confidentiality encourages private dispute resolution. The purpose of s67c was to protect the confidentiality of communications in the course of private dispute resolution. The point was made, in the plaintiff's submissions, that neither the Green Paper, nor other reports dealing with this aspect of privilege, such as ALRC Report No.26 on Evidence, had recommended a narrowing of the common law rule whatever it might be. The plaintiff referred to the Second Reading Speech on the Bill which led to the enactment of s67c where the desirability of encouraging private dispute resolution was referred to. That speech included the following passage (Hansard, Legislative Council, 10 March 1993 p1504):
    "The Government believes that the law protecting the
    disclosure of settlement negotiations should be clear and
    ascertainable and that legislation is necessary."

44. I accept the basic thrust of this part of the plaintiff's submission, but in my opinion this submission does not carry the matter far because the common law of Australia on the point in question is unclear and because, in my opinion, one cannot draw any particular conclusion on the point at issue from the Second Reading Speech.

45. The plaintiff then argued that, drawing on the matters already stated, there was every reason to read sub-paragraph (e) as not denying the availability of a claim of privilege in this case.

46. In addition, the plaintiff argued that the language of sub-paragraph (e) supported its approach. In brief, the plaintiff relied upon the use of "relates" rather than "related", upon the submission that the opening words of sub-paragraph (e) were unnecessary unless they were intended to introduce a reference to an issue in the current dispute; and upon the argument that elsewhere in sub-section (2) the draftsman, when referring to the original dispute, had used the expression "the dispute" and that accordingly it was significant that in sub-paragraph (e) the definite article was not employed. In my opinion there is some force in each of these submissions, but in my opinion none of them are decisive.

47. On the other hand the defendants argued that s67c was a code of sorts, and that one should not interpret it in the light of the common law. The point was made that the two sub-sections had to be taken together to determine the availability of privilege, and that the stated intention of making the law clear and ascertainable would not be achieved if the provisions of s67c were interpreted so as to conform to the common law.

48. During the course of argument a further ambiguity emerged. It can be illustrated by the following simple example. Assume that a driver negligently drives a motor car so as to cause injury to passenger one and passenger two. Assume that passenger one sues the driver, and in the course of settlement negotiations the driver makes certain admissions. Assume that the claim by passenger one is settled and that passenger two then sues. Can the driver claim privilege in respect of the communications containing the admissions made in the course of settling the claim by passenger one? On the defendants' argument in the present case, evidence of the communication is admissible because the issue in dispute between the driver and passenger one has been settled. On the plaintiff's argument evidence of the communication is not admissible because the issue in dispute between the driver and passenger two has not been settled, and the communication relates to that issue because it bears upon an allegation of negligent driving by the driver. But another way of approaching the matter, and this is what exposes a further ambiguity, would be to argue that the issue in the claim by passenger one was not negligence as against passenger one but negligence by the driver as against the passengers, and to argue that the dispute in relation to the issue of negligence as against the passengers had not been settled. As at present advised I consider that that argument would fail but I simply make the point that even if, as I have decided, the defendants' submissions should be accepted, there remains a problem of characterising the issue which was in dispute in the civil dispute in the course of which communications took place in connection with an attempt to negotiate settlement.

49. In the present case it seems to me that the relevant communications took place in connection with an attempt to negotiate the settlement of a civil dispute, namely a claim by certain companies that SBSANZ was liable to them for misleading statements made to them. In the present case the claim is that the plaintiff should be able to recover from the vendor of the shares in SBSANZ payments made by the plaintiff in respect of that liability of SBSANZ. Although there is a relationship between the two claims, and a clear one, because the plaintiff also claims that it was misled by the conduct of employees of SBSANZ and that the defendants are liable for such conduct, I am nevertheless of the opinion that the issue in the present proceedings is not the issue which was in dispute in the claim against SBSANZ.

50. Having said that, I will now set out my reasons for deciding that in the present case the Judge was right to conclude that the relevant evidence is admissible because s67c(2)(e) makes it admissible.

51. In my opinion, while s67c should be interpreted against the background of the common law, the common law on the point in question is not so clear as to give rise to a presumption that absent a clearly expressed intention it must be presumed that there was an intention not to alter the common law. In addition, the Second Reading Speech does not indicate an intention to preserve the common law, but simply an intention to make the law clear and ascertainable. Granted, the speech indicates an intention to encourage private dispute resolution, but in my opinion it is going too far to argue that each provision must be read as preserving privilege in aid of settlement as far as possible.

52. It seems to me that the focus of s67c(2) when it refers to "the dispute" is the dispute the settlement of which generated the communication or document. I appreciate that the absence of the definite article in sub-paragraph (e) is significant. But on balance I think that as a matter of consistency it makes sense to read sub-paragraph (e) as referring to that same dispute. As a matter of language the absence of the definite article does not prevent it being read in that manner. Secondly, in my opinion the shift of tense in sub-paragraph (e) is not significant. In my opinion either present or past tense was available for use, assuming the draftsman had in mind the meaning for which the defendants contend. Thirdly, I must say that to my mind it is simpler to read the provision as ending the bar to admissibility of evidence of a communication once the dispute which gave rise to the communication has come to an end. The natural focus of a limit upon a bar to admissibility is the ending of the dispute which gave rise to the communication in an attempt to settle the dispute. The natural focus is not an examination of the issues in dispute in litigation which later arises, and to which litigation the communication may be relevant. These considerations lead me to conclude that the reference in sub-paragraph (e) is to the dispute which gave rise to the communication as part of an attempt to negotiate settlement of the dispute.

53. I do not suggest that I regard the conclusion as an obvious one. In considering the matter there have been times at which I thought each of the rival arguments was correct. I am impressed by the good sense of what was said by Lord Griffiths in Rush and Tompkins Ltd v Greater London Council and Anor (1989) AC 1280, and I realise that the exclusion of the privilege in the situation to which he referred may have been inadvertent on the part of the draftsman of s67c. But, in the end, I consider that sub-paragraph (e) should be read as requiring a consideration of the status of the dispute which gave rise to the communication, not the status of the dispute in which it is later attempted to make use of the communication.

54. For those reasons, in my opinion His Honour's decision on this aspect of the matter should be upheld and the appeal against this part of his order should be dismissed.

JUDGE2 PRIOR J I agree with the reasons published by the Chief Justice and with the orders he proposes.

JUDGE3 WILLIAMS J I agree.