State of SA and Anor v Peat Marwick Mitchell and Ors No. SCGRG 94/983 Judgment No. 5261 Number of Pages 13 Evidence (1995) 65 Sasr 72

[1995] SASC 5261

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA OLSSON J

CWDS
Evidence - Facts Excluded From Proof - On Grounds Of Privilege - Professional Confidence - Legal Profession - Waiver Of Privilege

Appeal from decision of a Master as to privilege status of certain documents - decision that there had been an implied waiver - held that concept of "common interest privilege" not confined to situations in which the common interest parties have an interest in actual or anticipated litigation - disclosure pursuant to a duty to disclose is not a waiver - mere reference in pleadings to privileged material does not, of itself, give rise to an implied waiver of privilege - common law rules relating to privilege cannot be abrogated by procedural considerations - production of documents as a result of a direction from Royal Commissioner does not constitute a waiver - production of documents to Auditor-General pursuant to statute does not constitute a waiver of privilege.

Audit Act, 1921 ; State Bank Act s25; Royal Commission Act, 1917, referred to. Wigmore on Evidence (McNaughton Rev 1961) Vol VIII; Phipson on Evidence, 14th Edition applied. Southern Equities Corporation and Ors v Western Australian Government Holdings Ltd and Ors (Master Adams, 5 May 1993, unreported); Rank Film Distributors Ltd v ENT Ltd (Crawford J, 25 November 1994, unreported), not followed. Buttes Gas and Oil Co and Anor v Hammer and Anor (No 3) (1981) 1 QB 223; Bulk Material (Coal Handling) Services Pty Ltd v Coal and Allied Operations Pty Ltd (1988) 13 NSWLR 689; Network Ten Ltd v Capital Television Holdings Ltd and Anor (1995) 16 ACSR 138; Goldberg and Ors v N G and Ors (1994) 33 NSWLR 639; Woollahra Municipal Council v Westpac Banking Corporation and Anor (1994) 33 NSWLR 529; British Coal Corporation v Dennis Rye Ltd (No 2) (1988) 1 WLR 1113; 3 All ER 816; State of South Australia and Anor v Barrett and Ors (Perry J, 3 August 1995, unreported); Attorney-General for the Northern Territory and Others v Maurice and Others
(1986)161 CLR 475, discussed.

HRNG ADELAIDE, 2, 8, 16 August, 4 September 1995 #DATE 14:9:1995 #ADD 28:11:1995

Counsel for plaintiff:     Mr B Jenner, Mr B Martin QC
   and Mr P Slattery

Solicitors for plaintiff:    Crown Solicitor

Counsel for defendants:     Ms J Warner and Mr D Ryan

Solicitors for defendants: Mouldens as agents for Freehill
   Hollingdale and Page

ORDER
Appeal allowed

JUDGE1 OLSSON J This is an appeal by the plaintiffs/appellants against certain aspects of a decision of a Master having the oversight of these proceedings, concerning a disputed application by the defendants for an order for production of documents discovered by the appellants. All relevant documents were the subject of claims of legal professional privilege. The stance adopted by the respondents/defendants was that, in the circumstances, the claims to privilege were not maintainable.

2. In the event the learned Master allowed the respondents' application and made an order for costs against the appellants. He essentially based his decision on conclusions that certain documents (or portions of them) were not privileged at all and that there had been an implied waiver as to various other documents which were originally privileged.

3. Of necessity the dispute between the parties has required me to examine each of the documents in contention to gain a proper appreciation of its nature and contents. I will return to the outcomes of that examination as I proceed through these reasons. I do, however, note, at the outset, that some matters are no longer in dispute and I will not comment upon them.

4. In essence, all of the documents now under consideration contain references to legal advice tendered to the second appellant ("the Bank"), or to its wholly owned subsidiary, with regard to topics asserted by the respondents to be of relevance to issues arising in this action.

5. It is to be recalled that, at the present stage, by arrangement between the parties, the only pleading filed has been a first edition of the statement of claim. The respondents have been excused from filing a defence at this time. A first phase process of discovery is now well under way, following which it is envisaged that a revised statement of claim will be filed. At this point the issues arising in the action must be divined from the initial version of the statement of claim, as filed and delivered. That document avers that the respondents have been guilty of a variety of breaches of duty in conducting audits of the second appellant in respect of the fiscal years ended 30 June 1985-1990 inclusive.

6. As a matter of convenience I will deal with the issues arising on the appeal in the order in which they were addressed by Mr B R Martin QC, of senior counsel for the appellants.

7. I therefore initially turn to the documents numbered, for discovery purposes, 53, 54 and 62 respectively. (Only the second page of document 62 is in question for present purposes.)

8. Document 53 consists of extracts of the minutes of Beneficial Finance Corporation Ltd ("BFCL") which were transmitted to the Bank in June 1991. They were tabled before the Board of the Bank, on or after 27 June 1991, under cover of a memorandum seeking the endorsement of that Board of certain action taken by the Board of BFCL. The endorsement sought was duly given. Privilege was only claimed in respect of portion of one of the BFCL minutes.

9. As appears from the discovered and produced documentation, the BFCL minutes evidence an acknowledgment to directors of companies associated with BFCL that they will, subject to an expressed proviso, be exonerated from allegations of breach of duty in respect of any failure by nominated Associated Companies to repay advances due by them to BFCL. Reference is made to certain earlier like acknowledgments given in late 1990 and early 1991.

10. Privilege from inspection was claimed in respect of a segment of the BFCL minute containing references to advice given by internal legal counsel for BFCL concerning the propriety of directors of that company voting in favour of the acknowledgment.

11. Document 54 is a set of documents in identical terms to those in document 53. All that differs is that the covering memorandum in document 54 contains a handwritten endorsement of approval signed by the chairman of the Bank, whereas that in document 53 has a clearer, printed reproduction of such endorsement initialled by the Board Secretary.

12. The second page of document 62 constitutes a copy of a letter of opinion, dated 24 July 1991, written by Messrs Baker O'Loughlin to BFCL. It relates to the proposed entry by that company into a so-called "subparticipation agreement" with the Bank and it appears common ground that this was supplied by BFCL to the Bank, which had sought separate, similar advice apropos its own situation concerning entry into that agreement.

13. The learned Master discussed these documents in these terms:-
    "Documents 53 and 54 are not privileged. The advice
    referred to was advice given by a legal advisor to officers
    of the Beneficial Finance Corporation Ltd. By the terms of
    the document they clearly waived that privilege by
    disclosing the advice to ... (the Bank). In any event, the
    plaintiffs cannot claim privilege in respect of advice that
    was not given to them.

Document 62 consists of two copy letters, one from
    solicitors to the second plaintiff and the other from the
    same solicitors to Beneficial Finance Corporation Limited.
    The second letter is not privileged for the same reasons
    given in respect of Documents 53 and 54."

14. With all due respect to the learned Master I find myself unable to accept his reasoning, as so expressed.

15. As is clearly apparent from dicta in Buttes Gas and Oil Co and Anor v Hammer and Anor (No 3) ("Buttes") (1981) 1 QB 223 at 243, 251 and 267, Bulk Materials (Coal Handling) Services Pty Ltd v Coal and Allied Operations Pty Ltd ("Bulk Materials") (1988) 13 NSWLR 689 and Network Ten Ltd v Capital Television Holdings Ltd and Anor ("Network Ten") (1995) 16 ACSR 138 at 142, that where a privileged document is exchanged between two parties with a common interest, both parties are entitled to claim and maintain that privilege. Indeed, it would necessarily be a negation of the concept of common privilege if it were otherwise, as Mr Ryan, of counsel for the respondents, properly conceded. As hereafter appears, I conclude that BFCL and the Bank were, relevantly, parties with a common interest.

16. Nor am I able to accept that a waiver of privilege occurred in the circumstances above outlined.

17. The judgments of their Lordships in Buttes have generally been considered seminal writings bearing on the principle of so-called "common interest" privilege.

18. That was a case in which privileged documents were exchanged between parties who had a common interest in litigation or anticipated litigation. The principle was enunciated by Lord Denning MR in these terms:-
    "... There is a privilege which may be called a 'common
    interest' privilege. That is a privilege in aid of
    anticipated litigation in which several persons have a
    common interest. ...

In all such cases I think the courts should - for the
    purposes of discovery - treat all the persons interested as
    if they were partners in a single firm or departments in a
    single company. Each can avail himself of the privilege in
    aid of litigation. Each can collect information for the use
    of his or the other's legal adviser. Each can hold
    originals and each make copies. And so forth. All are the
    subject of the privilege in aid of anticipated litigation,
    even though it should transpire that, when the litigation is
    afterwards commenced, only one of them is made a party to
    it. No matter that one has the originals and the other has
    the copies. All are privileged."

19. In the same case Brightman LJ accepted the proposition that:-
    "... if two parties with a common interest and a common
    solicitor exchange information for the dominant purpose of
    informing each other of the facts, or the issues, or advice
    received, or of obtaining legal advice in respect of
    contemplated or pending litigation, the documents or copies
    containing that information are privileged from production
    in the hands of each. I think that this proposition follows
from Jenkyns v Bushby (1866) LR 2 Eq 547 and other cases in
    the same line and is a legitimate extension of the principle
    that protects confidential communications between co-
    plaintiffs or co-defendants for the purposes of an action."

20. (It has subsequently been held that it is not necessary for there to be a common solicitor to create a common interest privilege. Bulk Materials (infra).)

21. In the course of the present appeal it was suggested that the concept of common interest privilege is a narrow one, confined only to situations in which the "common interest" parties have a relevant interest in litigation which is actual or anticipated at the time at which the privileged material is exchanged. In my opinion, notwithstanding that the above authorities were the product of such situations, it is not so confined.

22. It is to be borne in mind that the concept of common interest privilege is invoked so as to counter a suggestion that privilege has been waived by the deliberate release or publication of privileged material, by the party entitled to claim privilege, to a third party. Waiver, of course, occurs where a party entitled to claim privilege performs an act which is inconsistent with the confidence preserved by it. (See discussion by Clarke JA in Goldberg and Ors v N G and Ors (1994) 33 NSWLR 639 at 670, and Giles J in Woollahra Municipal Council v Westpac Banking Corporation and Anor ("Woollahra") (1994) 33 NSWLR 529 at 539). As Giles J instanced in Woollahra, not every disclosure to a third party constitutes a waiver of privilege. So it is, for example, that disclosure pursuant to a duty to disclose is not a waiver (British Coal Corporation v Dennis Rye Ltd and Anorther (No 2) (1988) 1 WLR 1113; 3 All ER 816).

23. As is said by the learned author of Phipson on Evidence, 14th Edn para 20-29, a joint or common interest is not to be taken as a rigidly defined concept. It spans a variety of potential relationships, including partnership. Such a thesis was readily accepted by Giles J in both Bulk Materials at 695 and also Network Ten at 142.

24. Whilst a number of the authorities have in fact arisen in the context of actual or pending litigation, this has not invariably been the situation. Network Ten is an illustration of a situation where that was apparently not the situation. So far as I can determine, the facts in Rank Film Distributors Ltd v ENT Ltd (Crawford J, 25 November 1994, unreported) also related to a non litigation situation.

25. Indeed it would be surprising were it otherwise, because, as I have pointed out, waiver inherently concerns itself with the issue of actions on the part of a person entitled to privilege which evidence conduct inconsistent with an intention of maintaining that privilege, regardless of the particular setting.

26. With all due respect I am therefore unable to accept the view expressed in Southern Equities Corporation and Ors v Western Australian Government Holdings Ltd and Ors (Master Adams, 5 May 1993, unreported) in which he expresses the view that common interest privilege is a concept applicable only to litigation or anticipated litigation.

27. In the instant case we have a situation in which the Board of a wholly owned subsidiary specifically sought the concurrence of its parent Board in a proposal to adopt a particular financial stance, as to which the parent Board, patently, had a very important interest by virtue of the potential for actions of BFCL exposing the Bank, directly or indirectly, to financial loss or detriment by virtue of the mode of conduct by BFCL of its business operations. Had it not done so the Board of the Bank may well have been justified in initiating action to remove or otherwise discipline the Board of its subsidiary. In a very real sense the Board of BFCL had a duty both to seek the concurrence; and to disclose to its parent Board the legal opinion bearing upon the propriety of its actions. It is, I would suggest, difficult to envisage a more obvious situation of common interest.

28. I therefore propose to allow the appeal as to documents 53, 54 and 62, set aside the order made in relation thereto and dismiss the respondents' application as to those documents.

29. However, if I be considered incorrect in the foregoing reasoning, I would, in any event, grant similar relief to the appellants on a quite different basis. A perusal of the documents at once reveals that they arose in relation and related to events which all occurred subsequent to the end of the audit year 1990. On the pleadings as they now stand I cannot currently envisage how they could be said to be relevant to any issue obviously likely to arise between the parties. That being so it was manifestly premature to permit inspection at this juncture. If, as the pleadings develop, some relevance can be demonstrated, then, no doubt, other considerations of relevance might arise. However, that is certainly not the current scenario.

30. I therefore move on to a consideration of documents 29, 30, 35, 37, 59 and portion of 85.

31. The Master recorded that these documents are copy documents which were found in the audit working papers of the respondents. He inferred that they were provided by the Bank to the relevant respondents for the purposes of the audit carried out for the year ended 30 June 1991, an audit not the subject of the present proceedings. The Master inferred that, because the appellant had discovered the originals and claimed privilege, their content must presumably, relate to what may reasonably be anticipated as matters in issue between the parties - although upon what basis does not readily emerge. Having perused the subject documents I would describe them in this fashion:

32. Documents 29 and 30: Both of these documents comprise extracts from memoranda related to the Somerley construction project. Both touch on the proposed granting of an indemnity to Grocon Ltd, which was, apparently, the building contractor concerned in the project. Document 29 contains a reference to legal advice obtained concerning an aspect of the proposed strategy to be adopted. Document 30 refers to legal advice concerning the efficacy of the original construction contract.

33. I take the former document to have been submitted to the Board of the Bank. It is undated, but obviously came into existence post 30 June 1990, later in that year. The latter bears date 16 August 1990 and may well be the final two pages of Document 29, although this is not entirely clear to me.

34. Document 35: This is a memorandum dated 16 November 1990 from the Legal Department of the Bank to its Board. It reports upon the Bank's financial exposure (through its subsidiary SBSA (NZ) Ltd) in relation to a loan syndication concerning a body called Chase Corporation. The memorandum, inter alia, contains a series of references to advice received or being sought, as to the time of the memorandum, concerning what recourse action should be taken against various parties involved in the transaction - to recoup losses sustained by virtue of default on the part of Chase Corporation.

35. Document 37: This is a memorandum dated 6 March 1991 from its Melbourne Office to the Board of the Bank regarding the proposed initiation of legal proceedings against Tricontinental Corporation Limited and/or a firm of solicitors, in relation to losses sustained by the Bank pursuant to a syndicated facility in which it was involved. The memorandum seeks the approval of the Board to commence recovery proceedings and, to that end, recites the substance of legal advice received as to what strategies ought to be adopted. The Bank, currently, only seeks to maintain privilege as to some of the legal advice contained in it.

36. Document 85: This document contains minutes of a meeting held by the Lending Credit Committee of the Bank held on 27 November 1990 at which a range of facilities or proposed facility adjustments were received.

37. The minutes, inter alia, contain a summation of legal advice given concerning a facility related to entities known as Waltham Cross Pty Ltd and Victorian Housing Bonds Limited.

38. Having reviewed those documents I am by no means certain as to whether the inference drawn by the learned Master is, necessarily, the only inference which arises. It may equally be the situation that such material was used for the 1990 audit, to provide some verification of the likely net exposure or levels of actual loss which ought to have been disclosed in the accounts for the fiscal year ended 30 June 1990.

39. Whatever may be the true situation, the clear additional inference which does arise is that this documentation must have been called for by the respondents or one of them, as part of an annual audit function, and then supplied by the Bank for that specific purpose.

40. As the learned Master indicated in the course of his reasons it was the contention of the respondents that, because copies of the documents had been supplied for audit purposes, the Bank must be taken to have waived its privilege in respect of them.

41. In addressing this argument the learned Master referred to dicta of Gibbs CJ in Attorney-General for the Northern Territory and Others v Maurice ("Maurice") (1986) 161 CLR 475 and to a passage in Wigmore on Evidence (McNaughton Rev 1961) Vol VIII par 2327, which adverted to the double elements that are predicated in every waiver, namely, the element of implied intention and the element of fairness and consistency.

42. The ultimate conclusion of the learned Master was expressed in these terms:-

    "In my view, where documents which are protected by legal
    professional privilege are supplied by the client to a
    person who has been retained by the client to perform a task
    and the performance of that task requires the consideration
    of the contents of the documents provided, the privilege is
    waived as between the client and the other person (but not
    the confidentiality) so that if such documentation is
    discoverable in any action between the client and the other
    person, the client is obliged to produce that documentation
    for inspection."

43. In his reasons the learned Master commented that there is a nice question as to when privilege may be said to have been waived as a matter of implication. He posed the rhetorical question "Was it waived when the documents were handed over or was it waived when the proceedings were commenced (against the auditors)?" He felt that it was consistent with principle to say that privilege was not waived until the proceedings were commenced. "The commencement of the proceedings is the additional requirement", he said, "Just as the tender of the claim book in evidence would have been, in the view of Gibbs CJ in ... (Maurice) ... the additional element which notions of fairness required the implication that privilege had been waived".

44. He went on to say:-
    "Both lines of authority are, it seems to me, derived from
    the original principles stated in Wigmore that there is a
    two-part basis to the waiver: the implied intention and
    notions of fairness. In such circumstances, it matters not
    that some of the copy documents were provided by the second
    plaintiff as part of the 1991 audit. For the reasons
    previously given, if proceedings had not commenced, the
    documents would have remained privileged. What is important
    is that the documents relate to issues in dispute in these
    proceedings; they have been 'pleaded into issue'. My
    examination of the documents has revealed that matters
    pleaded by the plaintiffs in pursuing the causes of action
    relied upon have been directly and indirectly commented upon
    in each of the documents for which privilege has been
    properly claimed. It would be unfair to the defendant to
    allow the documents to be withheld because, in varying
    degrees, each of the documents, either directly or
    indirectly, goes to a proper understanding of some aspect or
    aspects of the plaintiff's case, or are relevant to matters
    of defence which might be pursued by the defendants. It
    would, as I have said, be inappropriate to wait and see the
    extent to which the documentation might be relied upon and
    tendered at trial by the plaintiff. Such an approach might
    well lead to the trial having to be adjourned so that the
    defendants might properly be in a position to meet the case
    presented. To take the risk that such an adjournment might
    have to be sought is contrary to the now well established
    principles of case flow management. "

45. In considering this aspect of the appeal it is desirable to note that the actual statement of principle espoused by the learned author of Wigmore and adopted by Gibbs CJ in Maurice is expressed as under:-
    "... regard must be had to the double elements that are
    predicated in every waiver, i.e., not only the element of
    implied intention, but also the element of fairness and
    consistency. A privileged person would seldom be found to
    waive, if his intention not to abandon could alone control
    the situation. There is always also the objective
    consideration that when his conduct touches a certain point
    of disclosure, fairness requires that his privilege shall
    cease whether he intended that result or not. He cannot be
    allowed, after disclosing as much as he pleases, to withhold
    the remainder. He may elect to withhold or to disclose, but
    after a certain point his election must remain final."

46. In Maurice, having referred to that excerpt, the learned Chief Justice went on to remark:-
    "The decisions in which this question has been considered
    seem to me to be particular applications of the rule that in
    a case where there is no intentional waiver the question
    whether a waiver should be implied depends on whether it
    would be unfair or misleading to allow a party to refer to
    or use material and yet assert that that material, or
    material associated with it, is privileged from production.
    Thus it has been held that the privilege in respect of a
    document is not waived by the mere reference to that
    document in pleadings (Roberts v Oppenheim; Buttes Oil Co
    v Hammer (No 3) or in an affidavit (Lyell v Kennedy;
    Infields Ltd v P Rosen and Son; Tate and Lyle 'International
    Co Ltd v Government Trading Corporation', The Times, 24
    October 1984) although the position will be different if the
    document is reproduced in full in the pleading or affidavit:
    Buttes Oil co v Hammer (No 3). These cases may be explained
    by saying that it is not unfair or misleading to refer to a
    document in a pleading or affidavit which is not put into
    evidence but that if the document is set out in full the
    privilege is waived. A fortiori, of course, privilege in
    respect of materials used in drawing a pleading or an
    affidavit and not referred to therein, would not lose their
    privilege because they had been used in that way."

47. Those conclusions were in accord with the reasoning of all other members of the Court.

48. It is to be recalled that the essential statement of principle emerging from Maurice was that the question to be considered in a particular case is whether any disclosure or use of material that has been made renders it unfair to uphold privilege otherwise existing in associated material. In that regard the question of whether the material that has been disclosed has been used in evidence is relevant, but not decisive. Before implied waiver can arise, however, there must have been the disclosure of a document, by pleading or otherwise, or the giving of evidence, without the disclosure of associated material, which would give a partial or misleading picture, or would otherwise prejudice or embarrass another party in the conduct of that party's case.

49. In my opinion Maurice stands as authority for no propositions beyond those which I have just expressed. In that case the court declined to uphold a contention that a mere reference, in what was tantamount to a pleading, to privileged material, without more, could fairly give rise to an implied waiver of privilege.

50. When one returns to the reasoning of the learned Master in the instant case it seems fair to say that his thinking was greatly influenced by what he described as "modern notions of case flow management". He expressed the views that:-
    "... A litigant today would not be permitted to wait until
    trial before making up his or her mind about whether to
    waive privilege. That must be a matter which is clearly
    decided at the time of commencement of proceedings and if
    there is no direct evidence of an express waiver, the law
    will imply a waiver."

51. With great respect that cannot be a proper legal foundation for the order made in relation to the documents now under consideration, particularly when coupled with his subsequent reasoning which I have earlier recited.

52. As Deane J emphasised in Maurice, at 490, the rules relating to privilege (and its qualifications such as waiver) are substantive general principles of the common law and not mere rules of evidence. It follows that they cannot be abrogated by mere procedural considerations unless this is achieved by a specific statutory provision or a rule of court made within power.

53. It follows that considerations of caseflow management, important though they may be, cannot be relied upon to vary what are otherwise clear legal rights vested in parties by the common law.

54. It has never seriously been suggested that, to use a phrase adopted by the learned Master, at this juncture, the documents presently under consideration have been "pleaded into issue" to the extent which would attract operation of the concepts enunciated in Maurice. Indeed, so far as I am aware, they have not specifically been adverted to, as to their detailed terms, in the initial statement of claim at all. It is simply not enough, for the purposes of Maurice, to say that they are relevant to causes of action relied upon by the appellants or matters of defence which might be pursued by the respondents.

55. I have reached the firm conclusion that, at least in the current state of the proceedings and the pleadings, there is simply no legal basis for directing production of the documents under consideration and those other documents not specifically adverted to by the learned Master in his reasons but included in his order as having been the subject of implied waiver, save for that portion of Document 37 conceded by the Bank. As was pointed out in State of South Australia and Anor v Barrett and Ors (Perry J, 3 August 1995, unreported), such a conclusion does not foreclose some review of the situation in the future if the form of pleadings (as they ultimately develop) or some other emerging circumstance lays a proper foundation for reconsideration of the question. In particular the situation may require re-appraisal when issues of causation become defined by the pleadings.

56. For the sake of completeness I ought, before departing from this aspect of the appeal, to record that no party contended that mere delivery to the auditors of the copy documents, in the circumstances in which and bearing in mind the purposes for which they must have been delivered, constituted an express waiver. As was pointed out the delivery fell to be seen in light of the then provisions of section 24(6) of the State Bank of South Australia Act, which specifically conferred on the auditors of the Bank both the right of access to its accounting and other records and the right to require from any officer of the Bank such information as was thought necessary for audit purposes, although Mr Ryan did, somewhat faintly, seek to argue that the statutory right was to inspect, but not be supplied with copies of documents. I do not consider that this distinction produced any different consequence.

57. In support of its notice of alternative contentions the respondents sought to hold the orders made by the learned Master on bases not relied upon by him in his reasons.

58. First, it was submitted, Document 5 was the subject of implied waiver because it was produced to the Royal Commission inquiry into the Bank "without any claim for privilege being made and by its distribution to persons appearing before the Royal Commission, and use by them in the course of that inquiry, without any such claim for privilege being made".

59. The short answer to that contention, as it seems to me, is that it is common ground that, before the Royal Commission, the Bank strenuously attempted to preserve the document, which was a Board minute reciting the effect of certain legal advice. It did so, but produced the document because, at the outset of the Commission hearings, the Royal Commissioner expressly ruled that section 7 of the Royal Commission Act, 1917 operated in a manner which disentitled the Bank from relying upon legal professional privilege as a basis for declining to produce documents to him.

60. With all due respect to the Commissioner I find that a somewhat startling interpretation of section 7. However, the fact was that the Bank was faced with such a ruling and, inter alia, produced Document 5 in compliance with it. How, then, it can be said that there was either an express or implied waiver escapes me. It is, I consider, no adequate response to that reasoning to now seek to argue, with the benefit of hindsight, that the ruling was erroneous and the Bank could have instituted proceedings to have challenged it. The fact was that the ruling was made, and the Bank could not have been required, on pains of being met with the present contention, to indulge in separate litigation to resolve the issue. Whatever may be my prima facie interpretation of the section, the issue has never, authoritatively, been pronounced upon, and must be considered an open question. The Bank was faced with a ruling which has never been set aside and, whilst it stood, was bound to comply with it. The approach espoused by Giles J in Woollahra at 538 was plainly applicable. In acting in accordance with the Commissioner's ruling, the Bank was not, itself, making use of the document in any relevant sense. It was doing no more than comply with the direction given in circumstances in which it was obvious that "refusal to comply would result in compulsion, or at least an attempt at compulsion ... and it did not use the material in such a way that it would be unfair for it to maintain the privilege ..."

61. Next, it was asserted that any privilege in relation to Documents 29, 30, 36, 45, 46 and 59 had been waived by the publication of the Auditor-General and Royal Commission Reports. As to this I understood Mr Ryan to argue that, because the substance of those documents had been placed before the Commissioner and/or Auditor-General and "exhaustively discussed" in their reports there is a lack of confidence remaining in the documents and an implied waiver of privilege.

62. Insofar as this argument is based upon disclosure to the Royal Commission, what I have already said apropos Document 5 is no less applicable to the present issue.

63. As to the Auditor-General, his inquiry was directed by Her Excellency the Governor to be conducted pursuant to section 25 of the State Bank Act, which vested in him the same powers as are vested in the Auditor-General by the Audit Act, 1921. All that need be said concerning that statute is that it vests wide discretionary powers in the Auditor-General or his delegate to inspect relevant records and documents and it creates it an offence to fail to comply with his requests.

64. Whilst it may be a moot point as to whether the relevant statutory provisions do or do not override the common law principles of privilege - an issue which, once again, has not been the subject of authoritative decision, so far as I am aware, the fact is that, as I infer, the Bank made the documents available to him at his direction.

65. Once more this was not a situation in which the Bank sought to use the material at all. It merely complied with a requirement directed at it. It follows that an essential pre-requisite to the existence of even an implied waiver has not been established.

66. The fact that the Commission or the Auditor-General saw fit to utilise information gained by compulsive powers in a particular fashion does not alter such a situation.

67. Quite apart from those basic considerations a very real question also arises as to whether certain of the documents, on the face of them, could possibly be said to be relevant to the audits sought to be impugned in these proceedings. My debate with counsel on that issue is recorded in the transcript and I need not dilate further on the topic.

68. The final point raised by Mr Ryan related to Documents 34, 35, 36, 41, 42, 43, 55, 59, 99 and 109. It asserts associated waiver by the production for inspection of other documents relating to the same transaction or advice, being the documents forming exhibit D1 before the Master. Documents 36 and 59 are no longer in issue and I exclude them from consideration.

69. Very little was said by counsel concerning this contention beyond that which was argued in relation to the other documents. I have perused all of those documents adverted to which I have been able to identify which have not already been reviewed in the foregoing reasons. Having done so I am satisfied that there is no substance in the point relied upon. All documents which I have perused post date the 1990 audit period, some of them by a considerable time frame. In many instances it is even difficult to perceive a relevance to the issues identified in these proceedings to date.

70. In short there is nothing in the notice of alternative contentions which leads me to the view that the conclusions of the learned Master which I have discussed can be supported in some other way.

71. I therefore allow the appeal and set aside the order of the Master as to those documents which remain in contention. I will hear counsel as to the question of costs.