Vasiliki Milankov as Executrix of the Estate of Lazo Pavle Milankov v DCH Legal Group (A Firm) - [2004] WASC 58

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: VASILIKI MILANKOV as Executrix of the Estate of LAZO PAVLE MILANKOV -v- DCH LEGAL GROUP (A FIRM) & ANOR [2004] WASC 58

CORAM: MASTER SANDERSON

HEARD: 15 OCTOBER 2003

DELIVERED : 6 APRIL 2004

FILE NO/S: CIV 1747 of 2002

BETWEEN: VASILIKI MILANKOV as Executrix of the Estate of LAZO PAVLE MILANKOV
Plaintiff
AND
DCH LEGAL GROUP (A FIRM)
First Defendant
CHRISTINE MILANKOV
Second Defendant

Catchwords:

Practice and procedure - Application for leave to inspect documents over which privilege claimed - Pleadings said to amount to waiver of privilege - Turns on own facts

Legislation:

Nil

Result:

Application dismissed

Category: B

Representation:

Counsel:

Plaintiff:     Mr M L Bennett
First Defendant             :     Mr G J Pynt
Second Defendant         :     Ms S T Burke

Solicitors:

Plaintiff:     Bennett & Co
First Defendant             :     Pynt & Partners
Second Defendant         :     Fiocco's Lawyers

Case(s) referred to in judgment(s):

BP Australia Ltd v Stallwood [2000] WASC 75
Commonwealth of Australia v Temwood Holdings Pty Ltd [2002] WASC 107
DSE (Holdings) Pty Ltd v Intertan Inc [2003] FCA 384
Ideas Plus Investments Ltd v National Australia Bank Ltd [2002] WASC 167
James v ANZ Banking Group Ltd (1986) 64 ALR 347
Pinson v Lloyds & National Provincial Foreign Bank Ltd (1941) 2 All ER 637

Case(s) also cited:

Nil

MASTER SANDERSON: This is an unusual, although not entirely unique, application in relation to inspection of discovered documents. It arises in the context of a most unusual claim. To put the application in context, it is necessary to say something about the facts which give rise to the dispute. That is best done by reference to the pleading.
As the heading to the action indicates, the plaintiff sues in her capacity as the executrix of the estate of Lazo Pavle Milankov ("the deceased"). The statement of claim pleads that the deceased was at all material times the natural father of one George Milankov, a director of Milankov Nominees Pty Ltd, the appointor of a trust known as the Milankov Family Trust (which had as its trustee Milankov Nominees Pty Ltd) and a director of Gateway Liquor Pty Ltd: par 2. By par 3 it is pleaded that at all material times the deceased or Milankov Nominees was the owner of certain real property. By par 4 it is pleaded that on 24 August 1988, certain parts of the land became the property of Gateway Liquor Pty Ltd. By par 5 it is pleaded that the first defendant was at all material times a firm of legal practitioners carrying on business in the State of Western Australia and instructed by the second defendant in respect of Family Court proceedings. It is pleaded that as a consequence of acting for the second defendant in these Family Court proceedings, the first defendant was the agent of the second defendant. It is pleaded that the second defendant was at all material times until 1998 the wife of George Milankov and the daughter‑in‑law of the deceased. All of these facts are uncontroversial.
It is pleaded that on or about 21 August 1997 the second defendant commenced proceedings in the Family Court of Western Australia against George Milankov, her then husband, seeking a property settlement. In March 1998 the second defendant, as part of her claim in the Family Court, sought a declaration that George Milankov had a beneficial interest in some of the properties referred to earlier in the statement of claim ("the Properties"). As a consequence of that application for declaratory relief, on 8 October 1998 the deceased applied to intervene in the Family Court proceedings. That application was granted on 20 October 1998. On 12 May 1999, so it is pleaded, the second defendant applied in writing to the National Australia Bank for a loan to finance the prosecution of the property claim in which the deceased had intervened. It is said that by letter dated 29 April 1999, in support of the application for finance, the first defendant represented to the National Australia Bank that the second defendant and George Milankov had a beneficial interest in the Properties. Particulars of that representation are provided. In fact the particulars quote the letter of 29 April 1999 verbatim. Because of the importance of that letter to this application, I will quote the particulars in full:
"The letter contained the expressed words:
'She is seeking from the Court, amongst other things, a declaration regarding the interest she and her husband have in property at:-
*21 - 23 Ledgar Road, Balcatta which is the site of four occupied warehouse units;
*22 - 24 Ledgar Road, Balcatta which is occupied by Brambles (Total Recall).
*The Morley Gateway Shopping Centre Development on the corner of Russell and Walter Roads, Morley.'
The Plaintiff will contend at trial that the express words in their natural and ordinary meaning conveyed the representation."
By par 12 it is pleaded that the representation made by the first defendant on behalf of the second defendant to the National Australia Bank was conduct in trade or commerce within the meaning of the Trade Practices Act and the Fair Trading Act. Further, it is said, that such conduct was misleading and deceptive and was therefore contrary to s 52 of the Trade Practices Act, or s 10 of the Fair Trading Act. It is also pleaded that the representation caused the National Australia Bank to approve the litigation loan to the second defendant. As against the second defendant, it is pleaded that she was knowingly concerned in the first defendant's contravention of the Trade Practices Act, or the Fair Trading Act and therefore she is personally liable to the plaintiff for damages. By par 13 it is pleaded that as a consequence of the misrepresentation which it is said led to the loan, the conduct of the Family Court action was prolonged. As a consequence, the deceased (and hence the plaintiff) is said to have suffered loss and damage. The loss and damage is particularised as the legal costs incurred by the deceased in dealing with the property settlement claim. These costs are said to total over $360,000. It is this amount which is sought by way of damages from both the first and second defendants.
Each of the defendants has filed a defence which deals comprehensively with the allegations raised in the statement of claim. Paragraph 7 of the first defendant's defence deals with the plaintiff's plea that as agent for the second defendant, the first defendant wrote to the National Bank in relation to the litigation loan. Because of the importance of par 7 of the defence, I will quote it in full:
"7.As to paragraphs 10, 11 and 12, the first defendant says:
(a)in or about August 1997 the second defendant applied to the National Australia Bank for a litigation loan in relation to the said proceedings in the Family Court of Western Australia which the National Australia Bank agreed to provide;
(b)on or about 29 April 1999 the first defendant, as solicitor for the second defendant, wrote to the National Australia Bank regarding a rollover and extension of the litigation loan, referred to in sub‑paragraph (a) hereof;
(c)the said letter contained, among others, the following words:
'She [the second defendant] is seeking from the Court, amongst other things, a declaration regarding interest she and her husband have in property at:
•21-23 Ledger Road Balcatta which is the site of 4 occupied warehouse units;
•22-24 Ledger Road Balcatta which is occupied by Brambles (Total Recall);
•the Morley Gateway Shopping Centre Development on the corner of Russell & Walter Roads, Morley;
…Mrs Milankov's case is that her husband has a half interest in those properties and that interest is to be added to the pool of assets available for distribution between them.
The home at 27 Manakoora Rise, Sorrento which she occupies, and which she owns jointly with her husband, has been valued at between $740,000 - $825,000. The only encumbrance on the home at present is a housing loan of about $25,000. At the very least, Mrs Milankovic is likely to be entitled of 70% of the value of that property and so, in that property alone, she has ample equity to cover any loan extended by the bank'.
The first defendant will refer at trial to the letter for its full terms and effect.
(d)by letter dated 27 May 1999, the first defendant, as solicitor for the second defendant, wrote to the National Australia Bank and after referring to its letter of 29 April 1999 said:
'It is not the case that Mrs Milankov believes her husband has a half interest in the properties at 21-23 and 22-24 Ledger Road, Balcatta and the Morley Gateway … her case is that her husband has an interest in those properties. At this stage, she is not sure of the extent of that interest and it is that interest that is to be determined in the Family Court (in her view it would be at least half)'
The first defendant will refer at trial to the letter for its full terms and effect.
(e)subsequent to its receipt of the letter of 27 May 1999, the National Australia Bank approved a rollover and extension of the litigation loan to the second defendant ('the Approval'); and
(f)the second defendant otherwise denies each and every allegation contained therein."
(The second defendant's defence contains a paragraph in almost identical terms. For present purposes, there are no material differences between the positions of the respective defendants to the claims made against them.)
By affidavit sworn 13 February 2003 Elizabeth Mary Hynes verified the first defendant's list of documents. As is usual, the list of documents contained in Pt 1 of the first schedule are those documents which the first defendant says related to a matter in issue and which the first defendant is prepared to make available for inspection by the plaintiff. Part 2 of the first schedule contained a list of documents over which the first defendant claimed privilege. In Pt 1 of the first schedule, letters from the first defendant to the National Australia Bank of 29 April 1999 and 27 May 1999 were discovered. Also discovered were certain bundles of documents. For instance, discovered as a bundle were "… letters sent by the first defendant to the solicitors for Lazo Pavle Milankovic in relation to the Family Court proceedings". The entire transcript of the Family Court proceedings is discovered. No attempt has been made to identify the documents discovered in bundles, or in any way delineate them either by subject matter or date. In Pt 2 of the first schedule, item 1 is the general reference to instructions and advice given to and received by the second defendant from the first defendant. Once again, no attempt is made to list in chronological order the individual items referred to in the general description in item 1. Item 2 refers to the "National Australia Bank Customer Particulars Loan Application". Items 3 through to 11 are individual letters from the first defendant to the National Australia Bank, or BankWest.
It is against this background that the plaintiff brings this present application which, in amended form, is dated 14 October 2003. The application is somewhat complicated, having about it a number of different aspects. Rather than paraphrase the application and risk doing less than justice to its comprehensive nature, I will reproduce the relevant parts of the application in full:
"The Plaintiff applies to a Case Management Registrar for the following interlocutory order(s):
1.Within 14 days from the date of this order the First Defendant make and file an affidavit:
1.1stating whether the documents, or classes of documents described in Schedules 1 and 2 hereto are or have at any time been in their possession, custody or power and if not then in their possession, custody or power when they parted with them and what has become of them;
1.2stating, in strict compliance with Order 26 Rule 4(1) of the Rules of the Supreme Court, whether the documents, or classes of documents described in Schedule 3 hereto are or have at any time been in their possession, custody or power and if not then in their possession, custody or power when they parted with them and what has become of them;
and that they do within the same period serve a copy thereof on the Plaintiff.
2.Within 14 days from the date of this order the Second Defendant do make and file an affidavit stating:
2.1whether the documents, or classes of documents described in Schedule 1 hereto are or have at any time been in their possession, custody or power and if not then in their possession, custody or power when they parted with them and what has become of them; and
2.2the basis for the claim to privilege set out at paragraph 2 of Annexure 'A' to the Affidavit of Christine Milankov sworn 11 February 2003 and filed in these proceedings on 12 February2003;
and that they do within the same period serve a copy thereof on the Plaintiff.
3.Within 14 days from the date of this order the First Defendant do produce for inspection their discovered documents numbered 2 to 11 (inc) set out in Part 2 of the First Schedule of Annexure 'EMH 1' to the Affidavit of Elizabeth Mary Hynes sworn and filed in these proceedings on 13 February 2003.
4.Within 14 days from the date of this order the Second Defendant do produce for inspection their discovered documents numbered 2 to 45 (inc) set out in Part 2 of the First Schedule of Annexure 'A' to the Affidavit of Christine Milankov sworn 11 February 2003 and filed in these proceedings on 12 February 2003;
5.5.1 Within 14 days of service of any affidavit required to be served by Orders 1 and 2 above, the Defendants do produce for inspection all documents referred to in the affidavit filed, provided that the same is not the subject of a claim for privilege; or
5.2if no such affidavit is required to be filed within 14 days of the date of this order the First Defendant do produce for inspection documents 1 to 3 (inc) and 7 to 9 (inc) set out in Part 1 of the First Schedule of Annexure 'EMH I' to the Affidavit of Elizabeth Mary Hynes sworn and filed in these proceedings on 13 February2003; and.
6.The Defendants pay the Plaintiffs' costs of the application in any event.
7.The requirements of Order 59 rule 9 be waived.
SCHEDULE 1
1.Correspondence (or copies thereof) passing between the First Defendant and Messrs Paterson & Dowding ('Paterson & Dowding Documents');
2.Correspondence and other documents (or copies thereof) passing between the First Defendant and the Second Defendant in relation to the Second Defendant's costs of the Family Court proceedings ('Instructions and Advice').
SCHEDULE 2
1.All documents held in connection with Caveat No. H308642 lodged with the Department of Land Administration against the Second Defendant's Manakoora Rise property on 13 December 1999 ('Caveat Documents');
2.All documents held in connection with the Deed of Charge dated 25 November 1999 pursuant to which Caveat No H308642 was lodged ('Charge Documents').
SCHEDULE 3
1.Court documents filed in Proceedings number PT 4685 of 1997 in the Family Court of Western Australia ('Court Documents');
2.Correspondence passing between the First Defendant and Messrs Kim Wilson & Co in relation to the Family Court Proceedings ('Kim Wilson Documents');
3.Transcript of the Family Court Proceedings ('Transcript'); and
4.Copies of documents discovered by Lazo Pavle Milankov in relation to the Family Court Proceedings ('Family Court Discovery Documents')."
It is par 3 and 4 of the application which is of particular concern to the defendants. What the plaintiff wishes to do is inspect those documents over which the defendants have claimed privilege. The argument put by the plaintiff, in summary form, is that the pleadings by the way they are framed put in issue advice given by the first defendant to the second defendant in the course of Family Court proceedings. That being so, the plaintiff submits, there is an implied waiver of privilege and the plaintiff is entitled to inspect the documents.
Before examining this submission in detail it is necessary to look carefully at what is in issue between the parties. The plaintiff says that on 12 May 1999 the second defendant applied in writing to the National Australia Bank for a loan of funds to finance the prosecution of her property claim in the Family Court proceedings. A little confusingly, by par 11 of the statement of claim the plaintiff says that on 29 April 1999 (13 days before the letter referred to in par 10 of the statement of claim was said to have been written) the first defendant represented to the National Australia Bank that the second defendant and her estranged husband had a beneficial interest in the Property. Presumably what happened is that the first defendant wrote to the bank before the second defendant actually made her application. In any event, the actual process is not in issue. What is important is that the plaintiff says that the first defendant wrote to the bank on 29 April 1999, making certain representations about her and her husband's interest in the Property and some time later the second defendant made an application for finance.
The defendants dispute that sequence of events. They say that an application for a litigation loan was made in August 1997 and was approved. They say that on 29 April the first defendant wrote to the bank seeking "a rollover and extension of the litigation loan". They then quote from the letter. That letter is discovered as document 1 in Pt 1 of the first schedule and is available for inspection. The first defendant says that a further letter was written to the National Australia Bank on 27 May 1999 and once again, the pleading quotes, in part, that correspondence. That letter too is discovered. It is document 2 in Pt 1 of the first schedule. It too is available for inspection. The first defendant then says that the rollover and extension of the loan was approved. For present purposes, it probably does not matter that a litigation loan was first approved in 1997 - if indeed that was the case. It also probably does not matter that the first defendant wrote to the bank twice in relation to the loan, rather than the once suggested by the plaintiff. What is clear is that there was a representation by the first defendant to the bank and that the loan was rolled over and extended.
The plaintiff says four things about the representation (or representations) made by the first defendant to the bank. First, it says that this was conduct in trade or commerce within the meaning of the Trade Practices Act or the Fair Trading Act: par 12.1. That may or may not be right. It is a matter for trial and is not presently of concern. Second, it is said that the representation was misleading or deceptive, or likely to mislead and deceive: par 12.2. The representation as pleaded in par 11 of the statement of claim is said to be a representation "to the National Australia Bank that Mrs Milankov and George Lazo Milankov had a beneficial interest in the properties". The particulars of the representation, which are the quote of the letter of 29 April 1999, do not actually contain in so many words such a representation. The letter points out that the second defendant was seeking from the Court a declaration regarding the interest she and her husband had in certain property. No doubt what the plaintiff would say is that it is to be inferred from that wording that the first defendant made the representation as alleged. Doubtless that proposition is arguable.

What is important is that the plaintiff sues under s 52 of the Trade Practices Act, or s 10 of the Fair Trading Act. There is no claim brought under s 51A of the Trade Practices Act or s 9 of the Fair Trading Act - that is to say, it is not suggested that the representation made a prediction as to future matters without reasonable grounds. It may well be that the plaintiff will have difficulty establishing that the particulars provided support the pleaded representation. It may well be said that what the particulars refer to is a prediction that a court will make a certain decision. But that is a matter for trial.
In a s 52 claim the belief, genuine or otherwise, of the party making the representation is not relevant. The fact that the first defendant may have made this representation with an honest belief that it was correct will not provide a defence to the plaintiff's claim. However, the mere fact that representations as to future matters do not come to pass, does not make the representation misleading or deceptive. A statement relating to the future may contain an implied statement as to present or past fact. That is what is alleged here. It is said there were representations that the second defendant was presently entitled to an interest in the Property through her husband. As I say, as a point of pleading, there can be no complaint: see James v ANZ Banking Group Ltd (1986) 64 ALR 347.
Given that the eventual result of the Family Court proceedings was a finding that neither the second defendant nor her estranged husband had an interest in the Property, in one sense at least the representation or the implied representation was wrong. But that assumes the representation was in fact a representation that at the time of writing the letter, the second defendant and her estranged husband had an interest in the Property. Clearly at the time that the letter was written, that question was still to be determined by the Court. The matter was in dispute. It might well be argued that the implied representation as to the present state of fact was that the first defendant, and the second defendant as a consequence of the first defendant's advice, were both of the view that there was an arguable case. Given the nature of legal proceedings and the inevitable uncertainty as to the outcome, it is at least arguable that this was the representation of present fact made by the first defendant when it wrote to the National Australia Bank.
The difficulty with that analysis of the dispute between the parties is that no alternative interpretation of the first defendant's advice is directly put in the defence. Paragraphs 7(a) through to (e) deal with the correspondence passing between the first defendant and the National Australia Bank. However, in par 7(c) and (d), the first defendant says that it will refer to the letters of 29 April 1999 and 27 May 1999 for their full terms and effect. That raises the possibility that the first defendant will argue that the representation made in the correspondence was as to a presently‑held belief about the eventual outcome of the second defendant's claim.
The position then really comes down to this. The plaintiff pleads the first defendant represented to the National Australia Bank that the second defendant and her husband had an interest in the Properties. That representation was wrong and amounted to misleading and deceptive conduct. Whether the first defendant held the views bona fide and on reasonable grounds so that there was no intention of misleading the bank, is irrelevant. On this analysis any advice the first defendant may have given to the second defendant is irrelevant and there could be no grounds for ordering that the plaintiff be permitted to inspect documents which would otherwise be privileged.
But what if the Court were to find that, properly construed, the letters amounted to a representation by the first defendant that it was of the view that there was an arguable case that the second defendant and her estranged husband had an interest in the Properties and that on balance, they would succeed at trial. If the first defendant is able to make out that argument at trial, then the plaintiff would fail. The representation could not be found to be misleading and deceptive as pleaded in par 11 and 12.2 of the statement of claim because the essential material fact - the actual representation pleaded - would not be made out. Once again, all that is relevant to this dispute are the letters referred to by the first defendant in par 7 of its defence. There is no basis upon which the plaintiff should have the right to inspect the documents discovered by the first defendant over which privilege is claimed.
It might well have been argued on behalf of the plaintiff (although it was not either in written or oral submissions) that par 7 of the first defendant's defence is a pregnant negative. This problem arises when a defence which at first sight appears to be a mere denial of the plaintiff's case and which therefore puts the plaintiff to proof of the material facts supporting the cause of action, in fact has latent within it a positive case. An example of such a plea is found in Pinson v Lloyds & National Provincial Foreign Bank Ltd (1941) 2 All ER 637. In that case the plaintiff sued the defendants alleging negligence in the purchase and sale of certain securities. The defendants, by their defence, denied they had effected purchases or sales without having been authorised by the plaintiff to do so. It was conceded by counsel for the defendants that the defence set up an affirmative case that the defendants had authority to effect transactions in question. Here, it cannot be the case that the first defendant says, by par 7 of its defence, that it honestly believed after a proper investigation that the second defendant and her estranged husband had an interest in the Properties. As I have said, the authorities make it plain that the bona fides of a person making a representation are not relevant in a misleading and deceptive conduct claim. The only positive case which might be said to arise based on the first defendant's defence is the one I have set out - that is, what was the proper interpretation of the correspondence and the representation made to the National Australia Bank.
On that analysis the only documents that are relevant to this dispute, leaving to one side the question of damages, are the two letters referred to in the defendant's defences. It is hard to see how any other document relates to a matter in issue between the parties. That becomes clearer when the rest of par 12 of the statement of claim is considered. Paragraph 12(3) simply pleads that the conduct was contrary to s 52 of the Trade Practices Act and s 10 of the Fair Trading Act. It does so by reference back to par 12.2. Paragraph 12.4 pleads that the correspondence caused the National Australia Bank to approve the litigation loan to the second defendant. That might or might not be correct and as it is denied by the defendants, it must be proved by the plaintiff. But that will be proved by evidence from the National Australia Bank and their internal documentation. The plaintiff has obtained an order for third party discovery from the National Australia Bank. It is not suggested that any other correspondence from the second defendant influenced the bank's decision. Accordingly, although documents 2, 4 and 6 to 11 in Pt 2 of the first schedule in the first defendant's discovery (these being documents over which privilege is claimed) are discovered, it is hard to see how they could relate to a matter in issue between the parties.
The bulk of the oral submissions in this matter dealt with the question of in what circumstances pleadings could lead to an order for inspection being made over documents which were otherwise privileged from production. Given the conclusion I have reached as to the nature of the dispute between the parties, it is not strictly necessary for me to deal with this issue. But in deference to the argument put by counsel, I should say something as to what, in my view, is the correct approach. I consider this question in BP Australia Ltd v Stallwood [2000] WASC 75. At par 12 in that decision I set down five circumstances where a pleading could give rise to an implied waiver of privilege. Subsequent to that decision, in the case of DSE (Holdings) Pty Ltd v Intertan Inc [2003] FCA 384, Allsop J undertook a detailed consideration of all of the authorities and reached the conclusion that the propositions I had put in the Stallwood decision were too widely stated.
Further, in Ideas Plus Investments Ltd v National Australia Bank Ltd [2002] WASC 167 I reached the conclusion that it was irrelevant which party in the pleadings raised a particular question. Once the privileged communication became an issue (or relevant to an issue) in the proceedings, such that fair determination of the proceedings required disclosure, there was a waiver. His Honour concluded that the authorities did not support that statement of principle. In my view, his Honour's reasoning is compelling and insofar as Stallwood and Ideas Plus Investments are at odds with his Honour's conclusions, I would follow the decision in DSE (Holdings) Pty Ltd v Intertan Inc.
Having said that, it is perhaps instructive to look briefly at both the Stallwood and the DSE decisions. In Stallwood, the plaintiff sought an order for rectification of the lease. The plaintiff said that based upon either unilateral or mutual mistake, it had entered into a written lease which did not accurately reflect the intention of the parties. The defendant denied that the lease did not accurately reflect the intention of the parties and sought discovery of communications passing between the plaintiff and it solicitors.
The argument was put that if the plaintiff wished to establish that it signed the lease on a mistaken belief as to its effect, then it had to show what advice it had received from its solicitors in relation to the lease. Of course, it was the plaintiff who pleaded the mistake and the defendant who put the state of mind of the plaintiff in issue. No positive case was put by the defendant; all it did was put the plaintiff to proof of that state of mind. I determined, in those circumstances, the otherwise privileged communications between the plaintiff and its solicitors should be available for inspection by the defendant.
DSE (Holdings) was a s 52 case. Without going to the facts in any detail, the plaintiff pleaded that it relied on certain representations made by the defendant. The defendant denied that there was any such reliance. One of the issues to be determined on the application (as set out by Allsop J in par 2 of his reasons) was whether the respondents, by merely joining issue in their defence with an allegation made by the applicant that they (together with the applicant) had a certain state of mind, so put their own state of mind in issue as to waive privilege on legal advice relevantly connected with the formation of their state of mind. The applicant said that the legal advice received by the respondents was relevant to the formation of the state of mind and they should therefore be entitled to inspect the privileged communications between the respondent and its solicitor. Allsop J rejected that submission. His Honour said (at 115):
"The act of mere denial by the respondents of an assertion by the applicants is not an act by the respondents which expressly or impliedly makes an assertion about the contents of any privileged communication or which necessarily lays any such communication open to scrutiny. There is no act of the respondents inconsistent with the maintenance of confidentiality. There is a joinder of issue on a question of fact to which the privileged communication can be seen as relevant. That is insufficient in my view for it to be concluded that there exists the necessary inconsistency enunciated by Mann v Carnell."
Perhaps the position is best summed up by what was said by Wheeler J in Commonwealth of Australia v Temwood Holdings Pty Ltd [2002] WASC 107 at [10], where her Honour said:
"… on the other hand, a party may necessarily put its state of mind in issue in the proceedings by, for example, pleading reliance upon some representation or other, or by seeking rectification of the contract for mistake; or a state of mind may be put in issue by some evidentiary assertion which is clearly relevant to the issues between the parties. In these latter types of case, fairness clearly requires the waiver of the privilege in relation to legal advice which may have contributed to that state of mind. It is to be noted, however, that it is the conduct of the party who possesses the privilege which is capable of waiving it. It is not apparently open to another party to litigation to force waiver of a party's legal professional privilege by making assertions about, or seeking to put in issue, that party's state of mind."
In my view there is nothing in this pleading which would put in issue the state of mind of either of the defendants. Far less is there any basis for concluding that it is the defendants who have raised that as an issue. That being so, I am satisfied that the plaintiff's claim as expressed in par 3 and 4 of the application ought be dismissed.
I am also not satisfied that there is any need for further discovery as anticipated by par 1 and 2 of the application. As I have said, it seems to me that the relevant documents here, so far as liability is concerned, are the letters passing between the first defendant and the bank. It is common ground that the Family Court application by the second defendant was unsuccessful and the reasons why it was unsuccessful are to be found in the decision of Judge Penny. That decision may be relevant, although there is no issue between the parties as to the outcome of the Family Court proceedings. Otherwise it is difficult to see that any other documents even relate to a matter in issue between the parties. As to quantum, the claim made by the plaintiff is for legal fees incurred as a consequence of intervening in the Family Court proceedings. These documents are in the possession of the plaintiff and it is hard to see that there can be any documents in the possession of the defendants which relate to that matter. In my view then, any further delineation of the documents in the way sought by the plaintiff is unnecessary.
For these reasons I would dismiss this application. Subject to hearing from the parties, the costs of the application should be paid by the plaintiff in any event.