T & D
[2006] FamCA 1560
•3 March 2006
[2006] FamCA 1560
FAMILY LAW ACT 1975
IN THE FAMILY COURT OF AUSTRALIA
AT SYDNEY
No. SYF.3096 of 2004
IN THE MATTER OF:
MR T
Husband
- and -
MS D
Wife
REASONS FOR JUDGMENT
BEFORE: Justice Le Poer Trench
HEARD: 27 February 2006
JUDGMENT: 3 March 2006
APPEARANCES:
| Mr Richardson Mr Lloyd | of Senior Counsel, instructed by Barkus Edwards Doolan, appeared on behalf of the Applicant Husband. of counsel, instructed by Karras Partners, appeared on behalf of the Respondent Wife. . |
Catchwords FAMILY LAW – LEGAL PROFESSIONAL PRIVILEGE - waiver
Legislation considered
Cases considered
The application before the Court is contained in exhibit “H5” a handwritten application made by the husband at the commencement of the hearing listed before me today. The matters which had been listed for determination by me in this matter on the 27th February 2006 are contained in a Minute of Order filed in Court by the husband and identified as exhibit “H4”. Many of the orders sought in exhibit “H4” can now be made by consent, however, there are remaining disputes relating to costs orders including an application for interim costs to be paid by the husband to the wife in the sum of approximately $75,500. Mr Richardson SC for the husband says that it is necessary for me to determine the application in exhibit “H5” before I move to determine the remaining disputed matters embodied in exhibit “H4”.
The application is provoked, says the husband, by the first two sentences of paragraph 10 of the affidavit of Bill George Karras sworn 24th November 2005. Those two sentences are as follows:-
“The wife has instructed me that she (sic) in a poor state of health and that she was diagnosed with breast cancer in 2003. In August this year she was discovered to have a boney (sic) secondary involvement from her breast cancer, when x-rays and scans disclosed that the disease had moved to the pelvis” (the bold lettering and underlining have been inserted by me to show the two distinct issues.)
The husband submits that the disclosure of instruction and the information disclosed in the second sentence above set out, amounts to a waiver of legal professional privilege. He asserts that the state of the wife’s health is a very significant issue in the case. In particular there seems to me, having regard to the evidence placed before me and the submissions made, that the issue relating to the wife’s life expectancy has been identified as an issue in this case for a considerable time.
Mr Richardson referred me to the case of H and N (unreported) being a decision of mine delivered on 8th April 2003. I will refer to this case shortly. He also referred me to passages in the case of Telstra v. BT Australia (1998) 85 FCR 152 being a decision of the Full Court of the Federal Court of Australia. In particular he took me to a passage which appears at paragraph “E” on page 166 which is in the following terms:-
“the law implies a consent to the use of privileged material……if by reason of some conduct of the party otherwise entitled to the privilege, it would be unfair to the other party, in a way which goes to the integrity of the legal process, for the privilege to be maintained.”
Mr Lloyd for the wife argued that the Evidence Act 1995 and in particular section 122 of that Act, had application to the determination of whether the wife should be required to produce documents for inspection by the husband which would otherwise be the subject of legal professional privilege. Mr Richardson said that Act had no application to the determination of the dispute before me and referred me to the decision of Northern Teritory of Australia and GPAO and Others 196 CLR 553.
The decision I delivered in the case of H and N on the 8th April 2003 is very similar in many respects to the case now calling for determination. In that case I considered the applicable law relevant to the waiver of legal professional privilege. I here set out relevant portions of that judgement.
10.Mr Richardson for the husband says that as the wife relies upon advice given by former solicitors, inaction taken by prior solicitors, no provision of information about the husbands and wife’s superannuation prior to the consent orders, then he is entitled to all documents which might be relevant to these issues. In fact Mr. Richardson’s primary position is that the wife has waived all of her legal professional privilege in relation to the files of any solicitor who has acted for her relevant to the matrimonial matters prior to and since the final property orders were made. He says that the waiver would cease at the point where she received the advice from her present solicitors to commence the proceedings.
11.Mr. Kirk, on behalf of the wife says that the wife’s actions in this case do not give rise to a general waiver of all legal professional privilege. He says that the concept of legal professional privilege is well entrenched in our legal system. It is fundamental to the orderly conduct of litigation in our society. He says that waiver operates as an exception to the general rule and that the waiver in this case is not a general waiver. Not every document produced in answer to the subpoena would be relevant or potentially relevant to the matters to be proved by the wife. He says that there is a specific procedure which should be engaged where the solicitor for the wife is required to go through each of the relevant groups of documents and produce an affidavit which annexes copies of all relevant documents. Some of those documents may have sections blacked out where part of the document is not relevant to the proceedings.
12.Apart from anything else Mr. Kirk highlights maters of privacy which ought to be taken into account as a fundamental right of a citizen in our community and care should be taken by the Court to safeguard that privacy.
13.Mr Richardson relies in part on a quote from Wigmore on Evidence 1961 where the following is said:-
“When (a privileged person’s) 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 disclose, but after a certain point his election must remain final".
14.Mr Richardson points to the advice referred to by the wife as having been received from her present lawyers that she should have received between 40% to 50% of the matrimonial assets at the time the orders were made. Mr Richardson says that in so disclosing the advice she opens the door of waiver to all advices and the whole of the material upon which the basis of the advice rested. Inferentially the summary of the wife’s affidavit is that prior to the present solicitors being engaged none of the solicitors who have acted for her since the property orders were made has provided her with similar advice.
15.Mr Richardson emphasises that in determining the issue of an implied or imputed waiver of privilege the determination is to be made by reference to considerations of fairness, not by reference to an inquiry as to the actual intention of the party who had made use of the material. (see Attorney General (NT)V. Maurice (1986) 161 CLR 475.)
16.Mr Kirk referred me to the decision of The Commonwealth of Australia v. Temwood Holdings Pty. Ltd & Ors [2002] WASC 107 (15 May 2002). In the decision of Wheeler J reference is made in paragraphs 7 to 10 to the principles applicable to waiver of legal professional privilege.
17.In paragraph 7 the following appears. “Reference to the existence of legal advice will not ordinarily amount to waiver of its contents, but disclosure of an assertion in it or of its effect may mean that fairness requires that the privilege has been waived in relation to the whole of the communication.”
18.In paragraph 8 the following is drawn to my attention. “However, the mere fact that there is a reference to the substance of the advice does not necessarily mean that privilege has been lost. It is necessary to consider whether fairness requires that privilege has been waived in relation to the whole of the communication (Hoad at 475. Attorney General (NT) v Maurice & Ors @ 488,493).”
19.In paragraph 9 my attention is drawn to the following. “That if, by its pleading or otherwise, a party puts its state of mind in issue and it can be shown that the legal advice in question was likely to have been relevant in the formation of that state of mind, the privilege will have been waived.”(Southern Equities v Arthur Anderson (1997)70 SASR 166 @193, Ampolex v Perpetual Trustee (1995) 37 NSWLR 405 @ 411)
20.Mr Kirk also took me to the decision of BP Australia Pty Ltd. V Nyran Pty. Ltd [2002] FCA 1302 (22 October 2002) In that case my attention was taken to paragraphs 7 to 12. Those paragraphs appear under the heading “Imputation of Waiver”.
“Imputation of waiver
7 On the issue of imputation of waiver a preliminary question arises as to whether the issue of imputation of waiver falls to be considered in accordance with the provisions of the Evidence Act 1995 (Cth) ("the Act") or in accordance with the common law.
8 The relevant section of the Act is s 122. In subs (1) it provides that Division of the Act in which it appears does not prevent "the adducing of evidence" given with the consent of the client or party concerned. In Telstra Corporation Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152 it was held by the majority (Branson and Lehane JJ, Beaumont J dissenting) that "consent" for the purposes of s 122(1) includes imputed consent. This view was reached by the majority by following the decision of the Full Court of the Federal Court in Adelaide Steamship Co Ltd v Spalvins (1998) 81 FCR 360. The relevant ratio decidendi of the Adelaide Steamship case was that the common law principles so far as they are inconsistent with the Act had been modified (as they are applied in courts in which the Act is operation) so as to avoid the inconsistency. Consequently, s 122(1) was to be understood in terms of the common law. However, in ESSO Australia Resources Limited v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49 the reasoning in Adelaide Steamship was disapproved so far as it related to that effect arising from inconsistency. Both in that authority and in its reasons in Mann v Carnell (1999) 201 CLR 1 the High Court accepted that in the application of s 122 (as well as ss 118 and 119 of the Act) the reference in them to "adducing of evidence" has the consequence that the sections operate only in such event and are not applicable to a request for the making available of documents for inspection. In the present case the issue has arisen as an interlocutory matter. Although it is during the course of the hearing it is not the occasion for the "adducing of evidence". Consequently, it is to the common law that reference must be made to determine the issue of imputed waiver upon which the case for the respondent is placing reliance.
9 The circumstances in which such imputation will arise has been formulated on a number of occasions and it is appropriate to look at the substance of those statements. In Thomason v Campbelltown Municipal Council (1939) 39 SR (NSW) 347 at 358 - 359 Jordan CJ said in relation to a case where one of the issues was what advice the plaintiff had received from her legal advisers as to her alternative legal rights, that "since the fact and nature of the advice is an issue in the case, I am of the opinion that privilege cannot be raised to prevent the proof of the advice". This principle was applied in Benecke v National Australia Bank (1993) 35 NSW 109. In Ampolex v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405 Giles CJ Comm D held that the principle extended to a situation where parties had made allegations raising the issue of their corporate states of mind, being states of mind to which their legal advice is "likely to" have contributed. He based his finding of likelihood on inference from the dates of and descriptions of the documents. In the absence of which he considered the principle may not have applied. The description expressly identified a letter from a legal firm enclosing an opinion of a certain date from senior counsel concerning rights of conversion attaching to notes being the subject of the dispute in the proceeding.
10 In Telstra Corporation at 168 the majority concluded that:"Where, however, a party relies on a cause of action, an element of which is the party's state of mind (including the quality of the party's assent to a transaction) the party is taken to have waived privilege in respect of legal advice which the party had, before or at the time of the relevant events, material to the formation of that state of mind."
That view was reached after a review of authority at 165 - 167. In addition to the decisions in Thomason and Ampolex the majority referred to Hong Kong Bank of Australia Ltd v Murphy [1993] 2 VR 419 at 439 and Pickering v Edmunds (1994) 63 SASR 357 at 362. The former was a case where issues were raised concerning legal advice received. The latter was where the plaintiff's knowledge of the legal effect of a deed was in issue. The majority also referred to the decision of the High Court in Attorney-General (NT) v Maurice (1986) 161 CLR 475 and Goldberg v Ng (1995) 185 CLR 83. In Ampolex Giles CJ Comm D had accepted that imputation of waiver is ultimately founded on the fairness considered in Maurice's case and not by reference to the actual intention of a party who made use of the material. With the exception of Benecke's case (where the appellant herself was found to have lifted the veil of secrecy by giving the version of the communications) the majority in Telstra considered that the other cases were ones in which, unless waiver of the privilege had been imputed to a party, the fact finding task of the court with respect to issues raised by that party would have been compromised. The majority stated (at 166):
"Where, as in this case, a party pleads that he or she undertook certain action "in reliance on" a particular representation made by another, he or she opens up as an element of his or her cause of action, the issue of his or her state of mind at the time that he or she undertook such action. The court will be required to determine what was the factor, or what were factors, which influenced the mind of the party so as to induce him or her to act in that way. That is, the party puts in issue in the proceeding a matter which can not fairly be assessed without examination of relevant legal advice, if any, received by that party. In such circumstances, the party, by putting in contest the issue of his or her reliance, is to be taken as having consented to the use of relevant privileged material, or to put it another way, to have waived reliance on the privilege which such material would otherwise attract."
In reaching this view, however, the majority accepted that the decisions of the High Court in Maurice and in Goldberg did not themselves directly support that view which found its support rather in the principles behind undue influence and legal professional negligence cases (discussed at 166).
11 The decision of the majority in Telstra came before a further Full Court in Perpetual Trustees (WA) Ltd v Equuscorp Pty Ltd (Ryan, Carr and Marshall JJ, 7 September 1999, unreported). The Full Court in Perpetual Trustees accepted that the authorities show the underlying principle for imputed waiver is that there has been some conduct on the privilege holder's part whereby it becomes unfair to maintain the privilege: par [15]. It could see no basis for distinguishing the matter before it from the situation which arose in Telstra, but rather considered that the situation before it was an even clearer case of imputed waiver because not only was there "a mere pleading of reliance" but there was an added ingredient of evidence that legal advice was sought and obtained at a relevantly material time. This evidence appeared in the schedule to an affidavit. The decision of the Full Court in Perpetual Trustees was made following the decision of a five member Full Court of the Federal Court in ESSO Australia Resources Limited v Federal Commissioner of Taxation (1998) 159 ALR 664 which itself had held that Adelaide Steamship was wrongly decided (the view ultimately accepted by the High Court on appeal).
12 There is a recent decision of a single judge in Fort Dodge Australia Pty Ltd v Nature Vet Pty Ltd (Hely J, 24 April 2002, unreported) where contravention of a special condition of a contract was alleged; in the alternative rectification was sought. Additionally, there was an allegation of misleading and deceptive conduct. In defence there was a plea of estoppel by way of convention and estoppel by representation. The effect of the defence was that the defendant propounded a positive case that it entered into the contract on the faith of representations and in so doing it raised an issue in the proceedings of its state of mind with respect to the matters relied upon at the time of entering into the contract and an associated lease. The issue of waiver was raised and Hely J pointed out that what brought about the waiver was the inconsistency which the courts, where necessary informed by considerations of fairness, perceived between the conduct of the client and maintenance of the confidentiality, not some overriding principle of fairness operating at large: Mann at 13. Hely J accepted that where a party makes allegations raising the issue of its state of mind, to which legal advice is likely to have contributed, the party cannot continue to claim legal professional privilege for that advice: Ampolex. He referred to the decision of the majority in Telstra and to the decision in Perpetual Trustees. He found it was clear from a chronology before him that contemporaneous legal advice was given to Nature Vet by its solicitors with respect to the condition in its draft form and its final form. Accordingly, he concluded that that party had waived privilege in relation to contemporaneous legal advice in respect of the matters raised in the relevant portion of the defence which bears upon the matters. “21.In paragraph 12 of the above referred to decision reference is made to the decision of Hely J and the following appears;- “Hely J pointed out that what brought about the waiver was the inconsistency which the courts, where necessary informed by considerations of fairness, perceived between the conduct of the client and maintenance of the confidentiality, not some overriding principle of fairness operating a large….Hely J accepted that where a party makes allegations raising the issue of its state of mind, to which legal advice is likely to have contributed, the party cannot continue to claim legal professional privilege for that advice.”
22.Mr Richardson draws my attention to the High Court decision in Mulley v. Manifold (1959) CLR 103 at 345 where Menzies J when considering the procedure of discovery said “only a document which relates in some way to a matter in issue is discoverable, but it is sufficient if it would, or would lead to a train of inquiry which would, either advance a party's own case or damage that of his adversary.”
23.It appears to me that the reference by Hely J. to the considerations of fairness perceived between the conduct of the client and the maintenance of confidentiality is a particularly helpful statement to consider when determining whether legal professional privilege has been waived in relation to specific documents or a category of documents.
24.The question which therefore falls for determination by me is whether having regard to those considerations of fairness the wife should be permitted to rely on confidentiality and therefore privilege, in the face of the case which she mounts in this Court. That is a case which may be fundamentally dependent upon her establishing that she did not at any time between the making of the property orders and the filing of her application ( or at least until she engaged her current lawyers and received their advice to proceed in the Court) receive any relevant advice.
Having regard to the above I accept the submissions of Mr Richardson that the Evidence Act does not have application to this determination.
The question then posed for determination is “has there been some conduct on the privilege holders part whereby it becomes unfair to maintain the privilege?”. Would that unfairness go to “the integrity of the legal process”?
Mr Richardson says that the material contained in paragraph 10 of the affidavit of Mr Karras as set out earlier in these reasons amounts to a partial provision of information which in the normal course would be regarded as privileged. Given the issues in dispute he says that it would be unfair to allow the wife to make that partial disclosure and not provide all the evidence, in her possession, upon which the statement was founded. He says that to proceed with the case in circumstances where the wife did not have to disclose that evidence would undermine the integrity of the legal process. I agree with that submission. In my view, to allow the wife to maintain a claim for legal professional privilege and thereby deprive the husband the opportunity to see the totality of the wife’s documents relating to the state of her health and/or her life expectancy, in circumstances where there is a clear issue for determination, would create unfairness to the husband in a way which goes to the integrity of the legal process.
That being the case it is clear that the wife should produce documents relative to the area of privilege waived.
Mr Lloyd says that even if the wife has waived privilege the call for documents as set out in exhibit “H5” is far too wide.
Exhibit “H5” does not appear to me to be “too wide” in terms of its’ call. The call is limited in time and the category of documents called for is specifically defined to the issue covered by paragraph 10 of Mr Karras’ affidavit, namely, the wife’s health. Consequently I would propose to make an order as sought by the husband in exhibit “H5”.
ORDER OF THE COURT
That the wife and her solicitor produce for inspection by the husband and his lawyers all correspondence, file notes and any other records of any communication between Mr Karras or any of his staff, on the one hand and Ms D on the other, touching upon Ms D’s health in the period 1 January 2005 to 24 November 2005.
I certify that this and the preceding 12 paragraphs
is a true copy of the Reasons for Judgment
herein of Justice Le Poer Trench.
Associate
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