Yang v New South Wales Land and Housing Corporation

[2023] NSWSC 84

Supreme Court

New South Wales

Medium Neutral Citation:

Yang v New South Wales Land and Housing Corporation [2023] NSWSC 84

Hearing dates:

21 October 2022

Decision date:

15 February 2023

Jurisdiction:

Common Law

Before:

Ierace J

Decision:

(1)      The defendant is granted access to those documents which have been produced by AJB Stevens Solicitors in packet identifier 201900251487001-S-4 which are identified on page 1 of the schedule to the judgment;

(2)      The defendant is granted access to those documents which have been produced by Ayoub Solicitors in packet identifier 201900251487001-N-1 which are identified on pages 2-6 of the schedule to the judgment.

(3)      Costs of the application to be costs in the cause.

Catchwords:

EVIDENCE – privileges – client legal privilege – plaintiff claimed privilege over subpoenaed documents – whether privilege waived – where unredacted medical records inadvertently disclosed – where alleged inconsistency between claims made and maintenance of privilege

Legislation Cited:

Evidence Act 1995 (NSW), ss 118, 119, 122, 131A

Limitation Act 1969 (NSW), s 14

Uniform Civil Procedure Rules 2005 (NSW), r 28.2

Cases Cited:

Barnes v Commissioner of Taxation (2007) 242 ALR 601; [2007] FCAFC 88

Chaina v Presbyterian Church (NSW) Property Trust (No 9) [2013] NSWSC 212

DSE (Holdings) Pty Ltd v Intertan Inc (2003) 127 FCR 499; [2003] FCA 384

Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited (2013) 250 CLR 303; [2013] HCA 46

GR Capital Group Pty Ltd v Xinfeng Australia International Investment Pty Ltd [2020] NSWCA 266

Grant v Downs (1976) 135 CLR 674

Mann v Carnell (1999) 201 CLR 1; [1999] HCA 66

Stamp v Stamp (2007) 37 Fam LR 235; [2007] FamCA 420

State of New South Wales v Betfair Pty Ltd [2009] FCAFC 160

State of New South Wales v Harlum [2007] NSWCA 120

Telstra Corporation Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152

Yang v New South Wales Land and Housing Corporation (No 2) [2021] NSWSC 1647

Yang v New South Wales Land and Housing Corporation [2020] NSWSC 1925

Category:

Procedural rulings

Parties:

Yan Lim Yang (Plaintiff)
New South Wales Land and Housing Corporation (Defendant)

Representation:

Counsel:
Ms N Obrart (Plaintiff)
Mr A Bhasin (Defendant)

Solicitors:
Ayoub Lawyers (Plaintiff)
Minter Ellison (Defendant)

File Number(s):

2019/251487

Judgment

1. HIS HONOUR: By a notice of motion the defendant seeks orders granting access to two packets of documents that have been produced to the Court consequent to a subpoena served upon the plaintiff’s former solicitors, AJB Stevens Lawyers (AJB) and a notice to produce served upon his current solicitors, Ayoub Lawyers (Ayoub). The subpoena sought AJB’s file concerning the plaintiff’s claim against the defendant. The notice to produce sought the copy of the same file that was transferred to Ayoub. The plaintiff has made a claim of client legal privilege over 26 documents identified in a schedule by AJB and 430 documents similarly identified by Ayoub.

The background to the application

2. The relevant background to the application is as follows. On 13 August 2019, at which time the plaintiff was represented by AJB, he filed a statement of claim seeking damages in tort for negligence, breach of bailment and/or conversion, in respect of certain antiques, which he claimed had an “estimated value” at the time of $1,051,586.

3. The plaintiff pleaded that “in or about 2000”, he entered into a residential tenancy agreement with the defendant to occupy an apartment in Kingswood (the premises), which he did until December 2012. In about that month, he travelled to the People’s Republic of China (the PRC) for a holiday, intending to be there for a period of 35 days. However, in January 2013, while still in the PRC, he was arrested and “incarcerated” until about June 2013.

4. On about 16 January 2013, the plaintiff informed the defendant in a telephone call that he had been incarcerated in the PRC. On about 13 February 2013, the defendant entered the premises and removed the goods, without his knowledge or consent. On 19 February 2013, ^[1] the defendant auctioned the goods, receiving the sum of $1,421.13. The plaintiff returned to Australia in about June 2013 and discovered that the defendant had removed and sold his goods.

   1. Both the Statement of Claim and Amended Statement of Claim pleaded the date of sale as 19 February 2019. The year 2019 is inconsistent with other pleadings filed by the plaintiff and thus was presumably a typographical error in both documents.

5. The plaintiff pleaded that the defendant had a duty of care, as the owner of the premises, “to use reasonable care to avoid foreseeable risk of harm to the lessee having regard to all of the circumstances of the case”. Further or alternatively, the plaintiff pleaded that on taking possession of the goods, the defendant became a voluntary bailee of them. Accordingly, the plaintiff sought damages in negligence for the defendant’s breaches of duty as the owner and the bailee of the goods and/or in conversion, in the sum of the difference between the auction price and their value.

6. On 2 March 2020, when still represented by AJB, the plaintiff filed an amended statement of claim, the only amendment being of a technical nature, concerning the defendant’s Australian Business Number (ABN).

7. On 18 March 2020, the defendant filed a defence in which it pleaded, inter alia, that the plaintiff’s causes of action, if any, had accrued by no later than 9 March 2013, being the actual date of the auction (recorded as being 19 February 2013 at [4] above, and 19 February 2019 in the Statements of Claim at ), which was more than six years before the plaintiff commenced the proceedings, and therefore his claim was statute-barred by s 14(1) of the Limitation Act 1969 (NSW). Section 14(1)(b) of the Limitation Act provides as follows:

“14   General

(1)   An action on any of the following causes of action is not maintainable if brought after the expiration of a limitation period of six years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims—

…

(b)   a cause of action founded on tort, including a cause of action for damages for breach of statutory duty …”

8. The following day, the defendant filed a notice of motion seeking that the proceedings be summarily dismissed or struck out, one of the bases being that the proceedings had been brought out of time.

9. On 4 June 2020, AJB wrote to the defendant’s solicitors advising that, whilst drafting the plaintiff’s response to the notice of motion, it had become aware of a conflict of interest that obliged it to cease to act in the matter.

10. On 23 June 2020, Ayoub wrote to the defendant’s solicitors, stating that:

“The Limitation point will be addressed by reference to the Plaintiff's incarceration in China and to his ongoing treatment as a psychiatric inpatient and outpatient during which time he was incapable of conducting his affairs.”

11. On 7 September 2020, the plaintiff filed a further amended statement of claim, amending some of the dates of relevant events. He pleaded that he departed for the PRC in “early 2012” rather than in December 2012 and that he was prevented from returning to Australia until “about July 2013”, returning in about that month. A further amendment was a pleading that the defendant was aware the plaintiff was incarcerated in the PRC “by at least December 2012”. This was particularised as an email of the defendant dated December 2012, referring to the plaintiff’s incarceration in the PRC “from April 2012”. The plaintiff pleaded that he first became aware of the defendant having removed and auctioned goods in “about mid September 2013”.

12. The plaintiff added four more items to the list of antiques that were in the apartment and adjusted their value, as at 4 February 2013, to $3,642,586. He pleaded that “most of the goods that were of substantial value were stolen from the premises” and that the goods removed by the defendant after the thefts and auctioned by a third party on behalf of the defendant had a total value of approximately $1,300,000.

13. On 23 October 2020, the defendant filed a defence to the further amended statement of claim pleading various defences and maintaining that, in any event, the plaintiff’s claim was not actionable because it was brought outside the limitation period.

14. On 10 November 2020, the plaintiff filed a reply alleging a disability:

“… within the meaning of section 52(1)(c) of the Limitation Act … from the date of his arrest in the PRC on 8 February 2012 until about 6 July 2013 when he returned to Australia or alternatively on 29 May 2013 when he was released from incarceration and his passport was returned to him in the PRC, that is for a period of 17 months or alternatively 15 months …”

15. The plaintiff pleaded that the earliest date that the limitation period could be found to have commenced was the week that some of his goods were stolen from his premises, which was the week of 13 to 19 February 2013. He therefore pleaded that the action was not statute-barred, since:

“[t]he earliest date upon which the limitation period could have expired is six years plus fifteen months from 13 February 2013, being July 2020.”

16. Section 52 of the Limitation Act provides:

“52   Disability

(1)   Subject to subsections (2) and (3) and subject to section 53, where—

(a)   a person has a cause of action,

(b)   the limitation period fixed by this Act for the cause of action has commenced to run, and

(c)   the person is under a disability,

in that case—

(d)   the running of the limitation period is suspended for the duration of the disability, and

(e)   if, but for this paragraph, the limitation period would expire before the lapse of three years after—

(i)   the date on which the person last (before the expiration of the limitation period) ceases to be under a disability, or

(ii)   the date of the person’s death,

(whichever date is the earlier), the limitation period is extended so as to expire three years after the earlier of those dates.

(2)   This section applies whenever a person is under a disability, whether or not the person is under the same or another disability at any time during the limitation period.

(3)   This section does not apply to a cause of action to recover a penalty or forfeiture or sum by way of penalty or forfeiture, except where the person having the cause of action is an aggrieved party.”

17. As to the meaning in the Limitation Act of the term “disability”, s 11(3) relevantly provides:

“11   Definitions

…

(3)   For the purposes of this Act a person is under a disability—

(a)   …

(b)   while the person is, for a continuous period of twenty-eight days or upwards, incapable of, or substantially impeded in, the management of his or her affairs in relation to the cause of action in respect of the limitation period for which the question arises, by reason of—

(i)   any disease or any impairment of his or her physical or mental condition,

(ii)   restraint of his or her person, lawful or unlawful …”

18. Two days after the plaintiff filed his reply, the defendant wrote to the plaintiff, pointing out a miscalculation in the amended pleadings. The defendant noted that on the basis of the dates pleaded, the maximum period of disability would have expired, at the latest, on about 6 July 2013, so that the six-year period of limitation expired on 6 July 2019, which was the month before the statement of claim was filed. The plaintiff replied in writing, seeking time to provide an amended reply “which will include further aspects of disability which were not included in the version filed and served”.

19. On 11 December 2020, the plaintiff filed an amended reply to the defence to the further amended statement of claim (the amended reply) in which he pleaded that there were two periods in which he was under a disability: between 8 February 2012 and 6 July 2013, when he was incarcerated in the PRC; and between 1 March 2017 and 21 March 2019, when he was suffering from a major depressive disorder and was:

“… incapable of, or substantially impeded in the management of his affairs in relation to the causes of action pleaded by the Plaintiff in these proceedings …”

20. On 23 December 2020, Cavanagh J ordered that the question of whether the plaintiff was a person under a disability and whether the matter is time-barred be determined separately pursuant to Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 28.2. His Honour set a timetable for the service of any “lay and expert evidence” by the parties. The plaintiff was to file such evidence by 26 February 2021: Yang v New South Wales Land and Housing Corporation [2020] NSWSC 1925. The potential periods of disability, within the meaning of ss 11(3) and 52(1)(c) of the Limitation Act, were identified in the orders as follows:

“(i)   between 8 February 2013 and 6 July 2013; and/or

(ii)   between 1 March 2017 and 21 March 2019; and/or

(iii)   between any such other periods between 8 February 2013 and 12 August 2019.”

21. The plaintiff did not comply with that timetable and ultimately served an expert report that it subsequently did not rely upon, for reasons that are unnecessary to address for the purposes of this application but which are canvassed by Dhanji J in Yang v New South Wales Land and Housing Corporation (No 2) [2021] NSWSC 1647. Relevantly for this application, the plaintiff now relies upon two expert reports by Dr Aman Suman, forensic psychiatrist, dated 9 November 2021 and 21 March 2022, and the defendant relies upon two expert reports by Dr Patricia Jungfer, psychiatrist, the first dated 7 September 2021 and the second undated, following an assessment on 6 December 2021.

22. In her report dated 9 November 2021, Dr Suman stated that she diagnosed the plaintiff as having had an adjustment disorder with mixed anxiety and depressed mood while he was detained in the PRC, until around the end of 2013. From January 2014, the plaintiff experienced “pervasive biological and psychological symptoms of depression”. In November 2016, he presented with a “major depressive disorder (severe) with associated psychotic symptoms”, leading to an inpatient psychiatric admission. Dr Suman diagnosed the plaintiff as having suffered a “major depressive disorder” since January 2014 until the date of her review, 9 November 2021. She concluded:

“Overall, I am of the view that [the plaintiff’s] mental illness, i.e., major depressive disorder has substantially impeded his ability (between Jan 2014 till Mar 2017) in the management of his personal affairs including legal matters related to the legal claim against the housing commission. [The plaintiff’s] cognitive functioning i.e. his ability to grasp and process information related to legal matters was adversely affected due to the complex mental health stressors he suffered from during the above period.

…

[The plaintiff] has continued to experience fluctuation in terms of his mental health since March 2017 requiring treatment and support from community health team. He has not been acutely unwell since Mar 2017 or required any inpatient psychiatric treatment …

…

… I remain of the view that [the plaintiff’s] illness, i.e., major depressive disorder has substantially impeded his ability (between Jan 2014 till Mar 2017) in the management of his personal affairs including legal matters related to the legal claim against the housing commission. I remain of the view that he would have struggled with his ability to grasp & process any information related to the legal matters.”

23. Dr Suman maintained the same opinion in her later report. Dr Suman’s opinion clearly did not support the plaintiff’s pleading in his amended reply that he was under a period of disability between 1 March 2017 and 21 March 2019. By way of a second further amended reply to the defence to the further amended statement of claim dated 30 November 2021, the plaintiff varied the period of alleged disability for the purposes of s 52(1)(c) and (d) of the Limitation Act to align with the period of disability identified by Dr Suman, that is, between January 2014 and March 2017.

24. In her report dated 7 September 2021, Dr Jungfer concluded that the plaintiff suffered from a depressive disorder and, between 17 and 23 November 2016, from a major depressive disorder. She considered that this one-week period was the only time that the plaintiff was incapable of managing his affairs and would come under the definition in the Limitation Act of having a disability.

25. On 13 April 2022, the defendant served a subpoena on AJB requiring production of its file in respect of the plaintiff’s “claim or potential claim against the defendant or the New South Wales Department of Family and Community Services”. On 8 August 2022, the defendant served a notice to produce on the plaintiff requiring production of the complete file that was transferred to Ayoub by AJB, in relation to the plaintiff’s claim or potential claim against the defendant.

26. On the same date as the service of the subpoena on AJB,13 April 2022, the defendant’s solicitors also served a notice to produce upon the plaintiff, requiring him to produce “all medical records, in unredacted form, that had been provided to Dr Aman Suman for the purpose of preparing his reports …”.

27. AJB have produced a schedule referring to 26 documents, with a date range of 15 August 2016 to 23 June 2020, described as packet “S-1”, but not containing those documents. The documents in the schedule were later produced in a packet noted as “S-4”. Ayoub produced two packets of documents, one of which is referred to as packet “N-1” and comprised five volumes of documents over which privilege is claimed. A schedule of documents in N-1 lists 430 documents, with a date range of 27-28 May 2002 to 27 October 2017.

28. The contents of S-4 and N-1 are the subject of a claim of client legal privilege by the plaintiff, pursuant to ss 118 and 119 of the Evidence Act 1995 (NSW), which provide as follows:

“118   Legal advice

Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of—

(a)   a confidential communication made between the client and a lawyer, or

(b)   a confidential communication made between 2 or more lawyers acting for the client, or

(c)   the contents of a confidential document (whether delivered or not) prepared by the client, lawyer or another person,

for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client.

119   Litigation

Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of—

(a)   a confidential communication between the client and another person, or between a lawyer acting for the client and another person, that was made, or

(b)   the contents of a confidential document (whether delivered or not) that was prepared,

for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding (including the proceeding before the court), or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party.”

The parties’ submissions

The defendant’s submissions

29. The defendant submitted that the plaintiff waived privilege by putting in issue his ability to manage his affairs in relation to the cause of action in the second and third periods identified by Cavanagh J, so that it would be unfair if it could not test the plaintiff’s claim (the first basis).

30. The defendant further submitted that, in any event, privilege has been waived inferentially, by the plaintiff having previously provided his medical expert with an unredacted copy of the plaintiff’s medical file and having served a copy of those notes upon the defendant. The defendant submitted that the medical records contain notes of statements by the plaintiff that tend to undermine the plaintiff’s claim that he was incapable of managing his affairs (the second basis).

29. As to the relevant principles to be applied to the determination of the plaintiff’s claim of client legal privilege, the defendant noted that s 131A(1) of the Evidence Act provides that in a preliminary hearing in which an objection is made to the disclosure or production of a document by the person who is obliged to do so, the provisions of Pt 3.10 of the Evidence Act (other than ss 123 and 128) apply. The defendant submits that, accordingly, s 122(2) of the Evidence Act applies to the determination of whether privilege applies to the documents produced by Ayoub. Section 122 relevantly provides:

“122   Loss of client legal privilege: consent and related matters

…

(2) Subject to subsection (5), this Division does not prevent the adducing of evidence if the client or party concerned has acted in a way that is inconsistent with the client or party objecting to the adducing of the evidence because it would result in a disclosure of a kind referred to in section 118, 119 or 120.

(3)   Without limiting subsection (2), a client or party is taken to have so acted if:

(a)   the client or party knowingly and voluntarily disclosed the substance of the evidence to another person, or

(b)   the substance of the evidence has been disclosed with the express or implied consent of the client or party.

…

(5)   A client or party is not taken to have acted in a manner inconsistent with the client or party objecting to the adducing of the evidence merely because—

(a)   the substance of the evidence has been disclosed—

(i)   in the course of making a confidential communication or preparing a confidential document, or

(ii)   as a result of duress or deception, or

(iii)   under compulsion of law, or

(iv)   if the client or party is a body established by, or a person holding an office under, an Australian law—to the Minister, or the Minister of the Commonwealth, the State or Territory, administering the law, or part of the law, under which the body is established or the office is held, or

(b)   of a disclosure by a client to another person if the disclosure concerns a matter in relation to which the same lawyer is providing, or is to provide, professional legal services to both the client and the other person, or

(c)   of a disclosure to a person with whom the client or party had, at the time of the disclosure, a common interest relating to the proceeding or an anticipated or pending proceeding in an Australian court or a foreign court.”

32. The defendant submitted that since s 131A applies only where the person who makes the claim of privilege is also the person producing the documents, it follows that common law principles of waiver apply to the documents produced by AJB.

33. The plaintiff noted that a claim of waiver of client legal privilege in the context of an issue of mental incapacity was considered by Davies J in Chaina v Presbyterian Church (NSW) Property Trust (No 9) [2013] NSWSC 212. That case concerned an issue of the mental capacity of two of the six plaintiffs, who alleged that their son died as a consequence of the defendant’s negligence, which caused them mental harm. The deceased’s father claimed to have suffered:

“… diminished memory and poor concentration … forgetfulness … inability to think clearly, confused state and thoughts … severe impairment in all pre-injury activities … inability to learn or process new material and information … Inability to give directions or make decisions.” (at [13])

34. In statements tendered in the proceedings, the father stated that in the relevant period he was “completely unable to do anything over and above very simple tasks” and that, following the death of his son, he had spent “hardly any time in relation to business matters”. Davies J noted, at [17], that, in evidence, the father repeatedly said that, following his son’s death, he was unable to, or did not, provide instructions to solicitors.

35. The defendant sought to tender correspondence between the parents and their solicitors in relation to a matter that was unrelated to that before the Court. Davies J considered whether client legal privilege over the correspondence had been implicitly waived by the plaintiffs having commenced the proceedings and the nature of some of the claims made in them. His Honour explained, at [2]:

“The purpose of the tender is not to prove the truth of the matters contained in the letters but to show that correspondence was passing between Mr and Mrs Chaina and their solicitors and that instructions were being sought by and provided to the solicitors in response thereto. The letters are concerned with proceedings that were then current between some or all of the Plaintiffs and third parties. The documents do not concern correspondence arising out of the present proceedings.”

36. Davies J found against the plaintiffs in Chaina, noting in relation to Mr Chaina in particular:

“20   … This evidence of incapacity includes his denials that he provided instructions or held meetings with solicitors. There is such inconsistency between those claims and that evidence on the one hand and the maintaining of the privilege on the other that it must be held that the privilege has thereby been waived.

21   It is important to note also that the Defendants do not seek [to] prove the truth of the matters contained in the correspondence that passed between the Plaintiffs and any legal advisors but seek that the material be admitted to show only that, inconsistently with what has been asserted by the Plaintiffs, Mr Chaina was capable of providing instructions and that he did so.”

The plaintiff’s submissions

37. The plaintiff submitted that the defendant bore an onus of establishing that the plaintiff had waived privilege and that, contrary to the defendant’s submission, there was not a need for evidence in respect of the claim of privilege when the nature of the documents brings them within the terms of s 119 of the Evidence Act.

38. In relation to the first basis upon which the defendant submitted that the plaintiff has waived privilege, the plaintiff submitted that the nature of the determination that was required by s 11(3)(b) of the Limitation Act was that which Beazley JA (Tobias JA agreeing) adopted in State of New South Wales v Harlum [2007] NSWCA 120 at [92], namely:

“… whether the person claiming to be under the relevant disability is able to ‘reason normally about the matters relevant to a potential cause of action, to understand and consider advice, and to give instructions about any action’.”

39. The plaintiff submitted that the defendant’s submissions on its first basis entailed the proposition that a party that raises a disability to extend the limitation period, pursuant to s 52 of the Limitation Act, “would be taken to have waived privilege with respect to its solicitor’s entire file with respect to the proceedings”.

40. In relation to the defendant’s second basis, the plaintiff submitted that his solicitors had corrected their error of providing the documents to their expert and therefore should not be treated as having waived client legal privilege. In so submitting, the plaintiff relied analogously upon observations made by the plurality in Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited (2013) 250 CLR 303; [2013] HCA 46 at 65-67 that a legal representative who receives privileged documents which are known or reasonably suspected of being confidential, and who is aware that the disclosure was inadvertent, should return them.

41. At a late stage of the hearing, the plaintiff sought to rely upon affidavit evidence of his solicitor to the effect that in fact the material provided to their expert was redacted. That part of his affidavit was not read, since the solicitor was not present, as had been requested by the defendant, for cross-examination.

42. The plaintiff sought to distinguish Chaina on its facts, noting that it concerned three items of legal correspondence rather than the complete file; the correspondence was not generated in the matter that was before the Court; they were not relied upon for the truth of their contents; and, whereas the issue in Chaina was the father’s state of mind, in this case, it was the period of time that the plaintiff suffered a psychiatric disorder and its effect on his prosecution of his cause of action.

43. Counsel for the plaintiff orally submitted that the plaintiff does not assert that he was unable to give instructions to his solicitors or that he was unable to interact with his solicitor as was the case in Chaina, but rather that he was “substantially impeded” in managing his affairs regarding his solicitor. It was therefore submitted that Chaina was of no assistance to the defendant.

The defendant’s submissions in reply

44. The defendant submitted that the nature of the documents sought was not sufficient to discharge the onus upon the plaintiff to tender evidence as to why privilege had not been waived, noting that the description of many of the 430 documents produced by Ayoub over which privilege is claimed, on their face, do not appear to be privileged. Examples include a document described as an “AGL electricity account” and documents described as correspondence with agencies and individuals other than the plaintiff.

45. The defendant submitted that it did not follow that a claim of disability automatically waived privilege and modified its claim for disclosure of AJB’s entire file to documents that were created between January 2014 and March 2019; that is, a combination of the current and previous periods of disability claimed by the plaintiff.

Consideration

46. The plaintiff has the onus of establishing that the documents are privileged: Grant v Downs (1976) 135 CLR 674 at 689. The defendant submits that this must be by “focussed and specific evidence” in respect of each particular document over which privilege is claimed, citing Barnes v Commissioner of Taxation (2007) 242 ALR 601; [2007] FCAFC 88 at [18], although I note that in some circumstances the nature of the documents may suffice: Grant v Downs at 689.

47. If privilege is established over one or more documents, the onus passes to the defendant to establish that it has been waived: State of New South Wales v Betfair Pty Ltd [2009] FCAFC 160 at [54]. As to the relevant principles to be applied, s 131A of the Evidence Act only applies where the person producing the documents is also the person that objects to access. Whether that is so when the claim of privilege is made by the plaintiff in respect of documents produced by Ayoub in response to a notice to produce against them and not the plaintiff, and which in any event are confined to the documents received by them from AJB, is unclear. However, whether the common law or the Evidence Act applies to the determination of that matter at this pre-trial stage is moot and unnecessary to resolve, since the relevant principles stated in s 122(2) of the Evidence Act and at common law are the same; that is, whether the client or party concerned “has acted in a way that is inconsistent with the client or party objecting to” the production of a document: Expense Reduction Analysts Group v Armstrong Strategic Management and Marketing at [32].

48. In relation to the second basis, in my view, the steps taken by the plaintiff to remedy their disclosure have neutralised the unfairness that otherwise would have resulted to the defendant. The plaintiff will not rely upon his earlier medical expert and submitted that his current medical expert, Dr Suman, has been provided with the same redacted copies of the plaintiff’s medical file as have been served upon the defendant, so that there is no disadvantage to the defendant from that exercise. In those circumstances, what otherwise would have constituted a waiver was deprived of that character.

49. In relation to the first basis, I note that in Mann v Carnell (1999) 201 CLR 1; [1999] HCA 66, Gleeson CJ, Gaudron, Gummow and Callinan JJ, said of the nature of waiver in the common law rule, known as legal professional privilege:

“28   At common law, a person who would otherwise be entitled to the benefit of legal professional privilege may waive the privilege. It has been observed that ‘waiver’ is a vague term, used in many senses, and that it often requires further definition according to the context. Legal professional privilege exists to protect the confidentiality of communications between lawyer and client. It is the client who is entitled to the benefit of such confidentiality, and who may relinquish that entitlement. It is inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege. Examples include disclosure by a client of the client's version of a communication with a lawyer, which entitles the lawyer to give his or her account of the communication, or the institution of proceedings for professional negligence against a lawyer, in which the lawyer's evidence as to advice given to the client will be received.

29   Waiver may be express or implied. Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. When an affirmative answer is given to such a question, it is sometimes said that waiver is ‘imputed by operation of law’. This means that the law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the subjective intention of the party who has lost the privilege … What brings about the waiver is the inconsistency, which the courts, where necessary informed of considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large.” (footnotes omitted)

50. In GR Capital Group Pty Ltd v Xinfeng Australia International Investment Pty Ltd [2020] NSWCA 266, Macfarlan JA (McCallum JA and Simpson AJA agreeing) referred to post-Mann v Carnell decisions and drew from them the following propositions, at [57]:

“(1)   The test is one of inconsistency between the privilege holder’s conduct and its maintenance of the privilege, not one of general fairness or of relevance to an issue in the proceedings.

(2)   Enquiring whether the privilege holder has made express or implied assertions about the contents of the confidential communications, and whether its conduct has therefore ‘laid open the communications to scrutiny’, assists in ensuring that the court’s focus is on inconsistency rather than simply relevance. If the privilege holder is understood to be asserting something about the contents of the communications, it is but a short step to conclude that it would be inconsistent for it to prevent those contents being scrutinised.

(3)   On the other hand mere relevance of the content of the privileged communications to an issue raised in the proceedings by the privilege holder does not equate to inconsistency – something more is needed. It is of the essence of legal professional privilege that, if maintainable, it entitles a party to withhold potentially relevant documents from inspection by the other party.

(4)   The determination of whether there has been an express or implied assertion about the contents of privileged communications giving rise to a relevant inconsistency is an evaluative decision to be made after consideration of the whole of the circumstances of the case. No hard and fast rules can be formulated. Those circumstances will include the degree of relevance of any advice to the issues in the proceedings, the centrality of the relevant issues in the proceedings and the likelihood of advice having been given, informed, as the High Court said in Mann v Carnell, by considerations of fairness.

(5)   Having considered all those circumstances, the court must decide whether it would be inconsistent with the privilege holder’s conduct for it to maintain privilege. The line between relevance to an issue and inconsistency in this context may be very fine and therefore one on which views might well differ.”

51. In Chaina, Davies J reviewed various judgments involving the issue of whether a claim of mental incapacity constituted an implied waiver of client legal privilege, including DSE (Holdings) Pty Ltd v Intertan Inc (2003) 127 FCR 499; [2003] FCA 384, in which Allsop J, as his Honour then was, said at [126]:

“A pleading of state of mind is raised. It is accepted that there are opened for scrutiny by that pleading confidential and privilege communications materially affecting or contributing to that state of mind. The inconsistent act is the propounding of the issue which, it is accepted, opens up, or makes relevant, in the sense discussed by the majority in Telstra, an examination of the confidential communication.”^[2]

2. The reference to “Telstra” is to Telstra Corporation Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152.

52. In Chaina, Davies J had regard to Stamp v Stamp (2007) 37 Fam LR 235; [2007] FamCA 420, in which a husband and wife had entered into consent orders relating to their property. The parties were legally represented during the course of negotiations. Subsequently, the wife filed an application to set aside the orders, pleading that as a result of a head injury, her health at the time she entered into the orders affected “her capacity to provide proper instructions in relation to the proposed terms”. The husband sought leave to inspect the file of the solicitors who acted for the wife at the time of the consent orders. The husband was refused access, the judge at first instance concluding:

“... What she has placed in issue is the impact of her state of health on her capacity to give instructions at the relevant time. It seems to me that the actual instructions given by her and the advice which she received from her solicitors would not touch on that issue. It seems to me that the question of [the wife’s] capacity to provide proper instructions might be expected to be a matter for medical evidence.”

53. On appeal to Full Court of the Family Court, the majority (May and Boland JJ) found that the wife must be taken to have waived her right to client legal privilege, stating:

“[57]   It seems that the wife proposes that the head injury of 1996 produced a mental disability, which affected her capacity to provide proper instructions to her solicitors when she agreed to consent orders in December 2003. There is expected to be medical evidence about any disability. The workers compensation records may provide evidence about her injury.

[58]   If there was a disability, then there must be an issue about the extent to which it affected her capacity to give instructions to her solicitors and how it affected her proper settlement of the property dispute. That will inevitably draw attention to the role played by her solicitors, and any advice to and influence upon the wife. An obvious question is what was the extent and manner of her instructions to them?

[59]   We respectfully cannot agree with the learned judge, who said that ‘… the actual instructions given by her and the advice which she received from her solicitors would not touch on the issue (of the impact or her state of health or her capacity to give instructions)’. It is true that medical evidence may be important, but it would be wrong to allow that evidence to be given, and then exclude the possibility of evidence showing the interaction between her and her solicitors.

[60]   The wife has raised the issue about her capacity to provide proper instructions. That issue is inconsistent with the maintenance of her usual right to procedural legal privilege. She must be taken to have waived her right to that privilege ...”

54. In this case, the plaintiff has alleged that his major depressive disorder impaired his ability to (in the words of Beazley JA in Harlum) “reason normally about the matters relevant to a potential cause of action, to understand and consider advice, and to give instructions about any action”. I concur with the reasoning of the plurality in Stamp and conclude that the defendant must be able to test the extent to which the plaintiff’s mental condition in fact impaired his capacity to properly instruct his legal representatives.

54. I am of the view that the plaintiff waived by implication his entitlement to client legal privilege in respect of both packets of documents, insofar as they were generated in the period of disability claimed by the plaintiff, namely, between January 2014 and March 2017.

55. Unlike the subject matter of the legal correspondence in Chaina, the documents to which the defendant seeks access were generated in the course of the plaintiff’s prosecution of this cause of action. However, as noted in GR Capital Group Pty Ltd, the test is not one of general fairness or relevance to an issue in the proceedings, but rather the inconsistency between the privilege holder’s conduct and its maintenance of the privilege.

The documents upon which privilege is waived

57. The defendant handed up as an aide-memoire a copy of the schedules of privileged documents produced by AJB and Ayoub, in which documents which appeared to be relevant to communications between the plaintiff and AJB, such as emails and conference notes, were highlighted in green highlighter (MFI 1). I note that MFI 1 did not include the schedule of the documents in volume 1 of N-1, which I presume to be an oversight by the defendant. Annexed to this judgment is a schedule (Schedule 1) comprising those highlighted documents that are dated between 1 January 2014 and 31 March 2017, to which access is granted. The number of each document, as listed in the schedules for S-4 and N-1, is retained.

Costs

58. The defendant’s notice of motion includes a prayer that the Court order that costs of the motion be met by the plaintiff. Neither party has addressed the issue of costs. I am inclined to order that costs be in the cause.

Orders

59. I make the following orders:

1. The defendant is granted access to those documents which have been produced by AJB Stevens Solicitors in packet identifier 201900251487001-S-4 which are identified on page 1 of the schedule to the judgment;

2. The defendant is granted access to those documents which have been produced by Ayoub Solicitors in packet identifier 201900251487001-N-1 which are identified on pages 2-6 of the schedule to the judgment.

3. Costs of the application to be costs in the cause.

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Schedule 1 (157239, pdf)

Endnotes

Decision last updated: 15 February 2023