Supreme Court of WA|2005-03-11

Allison Pty Ltd (Acn 056 940 437) t/a Pilbara Marine Port Services v Lumley General Insurance Ltd [2005] WASC 37 (11 March 2005)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : ALLISON PTY LTD (ACN 056 940 437) t/a PILBARA MARINE PORT SERVICES -v- LUMLEY GENERAL INSURANCE LTD [2005] WASC 37

BETWEEN : ALLISON PTY LTD (ACN 056 940 437) t/a PILBARA MARINE PORT SERVICES

Practice and procedure - Discovery - Application for inspection of documents - Claim of legal professional privilege - Whether implied waiver of privilege by affidavit in interlocutory application - Whether any waiver limited to interlocutory application - Turns on own facts

Attorney-General for the Northern Territory v Maurice [1986] HCA 80; (1986) 161 CLR 475

Australian Competition & Consumer Commission v Australian Safeway Stores Pty Ltd (1998) 81 FCR 526

British American Tobacco Australia Services Ltd v Cowell [2002] VSCA 197; (2002) 7 VR 524

British American Tobacco Australia Services Ltd v Cowell [2003] VSCA 43

Goldman v Hesper [1988] 1 WLR 1238

Harmony Shipping Co v Saudi Europe Line [1979] 1 WLR 1380

State Bank of South Australia v Smoothdale No 2 Ltd, unreported, FCt SCt of South Australia, 2 June 1995

Ampolex Ltd v Perpetual Trustee (Canberra) Co Ltd [1996] NSWSC 7; (1996) 40 NSWLR 12

British American Tobacco Australia Service Ltd v Cowell [2003] VSCA 43

Derby & Co Ltd v Weldon (No 10) [1991] 2 All ER 908

Distillers Co (BioChemicals) (Aust) Pty Ltd v Ajax Insurance Co Ltd [1974] HCA 3; (1974) 130 CLR 1

Nigel Watts Fashion Agencies Pty Ltd v GIO General Ltd (1994) 8 ANZ Ins Cases 61-235

SQMB v Minister for Immigration, Multicultural and Indigenous Affairs [2004] FCA 241; (2004) 205 ALR 392

Standard Chartered Bank of Australia Ltd v Antico (1993) 36 NSWLR 87

1 MASTER NEWNES: This is an application by the plaintiff for inspection of certain documents which the defendant says are subject to legal professional privilege. The plaintiff contends that the defendant has waived privilege in relation to the documents.

2 In order to make the current application explicable it is necessary first to describe the background to it and the relevant pleadings.

3 In the action the plaintiff claims indemnity, under a policy of insurance issued by the defendant, in respect of the loss of a vessel, the "Pilbara Pilot", in a cyclone on 23 February 1995. The defendant has denied liability under the policy on the ground, among others, that at the time of the cyclone, contrary to an express term of the policy, the mooring on which the "Pilbara Pilot" was moored was not a cyclone proof mooring and also that it was not a mooring approved in accordance with the statutory requirements of the local authority. The plaintiff, on the other hand, says, among other things, that the mooring was a cyclone proof mooring approved by the Harbour Master and the defendant is in breach of its obligation of good faith under the contract of insurance in seeking to deny liability and to defend this action on the ground that certain written formalities in relation to the approval of the mooring were not complied with.

4 The relevant statutory requirements were the Dampier Port Authority Regulations 1989 (WA), made under the Dampier Port Authority Act 1985 (WA). The relevant regulations were as follows:

(a) install a mooring; or

(b) use an existing mooring

within the Port unless that installation or use is approved by the Harbour Master

39. An application for approval of the installation of a mooring or the use of an existing mooring within the Port shall be made to the Harbour Master in an approved form and shall contain the following information - [the prescribed information is then set out]

40. On receipt of an application under regulation 41, the Harbour Master may, if he is satisfied that -

(a) the location of the mooring is appropriate;

(b) the mooring is generally suitable for the vessel to be located thereon; and

(c) the vessel to be located on the mooring will not constitute a danger or interfere with the navigation of other vessels in the Port,

grant approval for the installation of a mooring or the use of an existing mooring by notice in writing to the applicant.

44. Unless the Harbour Master otherwise permits in a particular case, every mooring apparatus shall be of such design, material, dimensions, size, type and construction as in the opinion of the Harbour Master will provide a secure mooring for the vessel to be placed thereon during cyclone conditions"

5 In par 6 of the statement of claim the plaintiff pleads that, on or about 23 February 1995, the "Pilbara Pilot", while in navigational limits prescribed by the insurance contract, was subjected to severe wind and sea conditions generated by cyclone "Bobby", leading to an ingress of water which caused the vessel to sink and be totally lost. In par 6A it is pleaded that the loss of the "Pilbara Pilot" was caused by perils of the sea.

6 In its defence the defendant, relevantly for present purposes, pleads in par 3.3 that it was an express term of the contract, and the plaintiff expressly warranted, that all insured vessels were moored on cyclone proof moorings. It pleads in par 3.4 that it was an express term of the contract, and the plaintiff expressly warranted, that the vessel was to be in survey, manned, crewed and operating strictly in accordance with local statutory authority requirements.

7 In par 6 of its defence the defendant denies the allegations in pars 6 and 6A of the statement of claim and pleads that under the regulations the plaintiff was prohibited from using a mooring unless the use was approved by the Harbour Master and that, as at the date of the loss, the Harbour Master had not approved any mooring for the "Pilbara Pilot" in that no application, or no application in an approved form, had been made for the use of a mooring and the Harbour Master had not, pursuant to reg 40, satisfied himself of the prescribed matters and had not granted approval for use of the mooring by notice in writing. The defendant pleads in the alternative that if a specific mooring had been approved, it was not a cyclone proof mooring and was not suitable for cyclonic conditions, and in any event the "Pilbara Pilot" was not on that mooring at the time it was lost but was secured by lines to the stern of another vessel which was on a different mooring.

8 The defendant pleads that, accordingly, the plaintiff was in breach of the warranty to moor the "Pilbara Pilot" on a cyclone proof mooring and to operate it strictly in accordance with the statutory requirements of the local authority.

9 The defendant also alleges in pars 21 and 22 of its defence that the matters pleaded in pars 6 and 6A of the defence were material matters that the plaintiff was obliged to disclose to the defendant before the contract of insurance was entered into and it pleads in par 23 that, in failing to do so, the plaintiff was in breach of its duty of disclosure.

10 Prior to 28 October 2003, by its reply, the plaintiff, among other things, pleaded in par 12 that both parties to the insurance contract were under a duty to the other to act, alternatively it was an implied term of the insurance contract that the parties would act, with the utmost good faith. It was alleged in par 13 that that duty required the defendant not to act in a manner which offended notions of fairness or reasonableness, or alternatively not to act in a manner which was capricious or unreasonable, in assessing the plaintiff's claim under the policy

11 The plaintiff goes on to plead in par 14 of the reply that in breach of the duty or term referred to in par 12, the defendant acted unfairly, capriciously, unreasonably, and/or in a manner which offended notions of fairness or reasonableness or community standards, when assessing the plaintiff's claim under the Insurance Contract, and/or refusing the plaintiff's claim under the Insurance Contract on 10 May 1995, and in maintaining the refusal to pay the claim thereafter and defending this action on the basis that the plaintiff had breached the warranties referred to in pars 3.3 and 3.4 of the defence. The plaintiff then pleads:

"15. In support of the averment at par 14 the Plaintiff relies on the following facts:-

15.1 The Defendant refused the Plaintiff's claim under the Insurance Contract, maintained the refusal to pay the claim thereafter and defended this action on the basis that:-

(a) the Plaintiff had not applied to the Harbour Master of the Port of Dampier for approval of the 'Pilbara Pilot's' usual mooring, and/or had not made that application on an approved form (Defence par 6.1.A.1.1), when the Defendant knew, or could readily have ascertained that:-

(ii) the Dampier Port Authority did not have an approved form;

(b) the Harbour Master had not received an application for approval of the use of the mooring of the 'Pilbara Pilot', had not satisfied himself that the location of the proposed or any mooring was appropriate, had not satisfied himself that the mooring was generally suitable for the 'Pilbara Pilot', and had not granted approval for the use of a mooring by the 'Pilbara Pilot' by a notice in writing to the Plaintiff (Defence par 6.1A.1.2), when the Defendant knew or could readily have ascertained that:-

(i) the Port Authority did not have an approved form;

(ii) the Harbour Master usually approved moorings in the Dampier Port informally, and did not usually give approval by notice in writing;

(iii) the Harbour Master had given his approval to the mooring of the 'Pilbara Pilot' on its usual mooring, from which it could reasonably be inferred:-

(ii) the mooring was suitable for the 'Pilbara Pilot', and

(2) that if requested to do so by either Plaintiff or Defendant he would have confirmed his consent in writing;

(c) the Harbour Master had not approved the 'Pilbara Pilot's' mooring (to the 'Pilbara Jarrah') at the time she was lost (Defence pars 6.1A.2, 6.1A.3 and 6.1A.4), when the Defendant knew or could readily have ascertained the facts referred to at par 9;

(d) the 'Pilbara Pilot's' usual mooring was not a 'cyclone proof mooring' (Defence par 6.2), when it knew, or could readily have ascertained that any mooring in the Port of Dampier for which the Harbour Master had given approval, was in the Harbour Master's opinion a secure mooring for the vessel to be placed on during cyclone conditions, that is the approved mooring was a cyclone proof mooring. Dampier Port Authority Regulations 1989 Reg 44;

(e) it wished to substitute its own opinion as to whether the 'Pilbara Pilot's' usual mooring was a cyclone proof mooring, for the Harbour Master's opinion (Defence par 6.2);

15.2 ... "

12 In August 2003 the plaintiff's solicitors made an application to the Dampier Port Authority under the Freedom of Information Act 1992 (WA). As a result of that application they obtained a copy of a letter from Manu Marine, on behalf of the plaintiff, to the Dampier Port Authority of 29 September 1995 and the reply from the Dampier Port Authority. In Manu Marine's letter to the Dampier Port Authority, Manu Marine asked, among other things:

"Does the Dampier Port Authority accept, despite the lack of documentation, that they approve the mooring as a cyclone proof mooring?"

13 In their response the Port Authority said, relevantly:

"The Port Authority does accept that, despite the lack of documentation, the abovementioned mooring was an approved mooring.

There are no standard application forms regarding moorings."

14 Following receipt of the documents under the Freedom of Information Act there was correspondence between the solicitors for the parties in relation to those documents. On 3 September 2003 the defendant's solicitors wrote to the plaintiff's solicitors contending that the documents were privileged, but they went on to say:

"However, in our view these documents are largely irrelevant. Accordingly, my client is prepared to waive privilege over Manu Marine's letter of 29 September 1995 and Captain Hammond's response of 1 November 1995. ...

...

We disagree that privilege has been waived on Manu Marine's fifth report. However my client has no real difficulty in providing this document to you and accordingly my client is prepared to waive privilege over this document."

15 The fifth report of Manu Marine consisted of a letter of 2 November from Manu Marine to the defendant's solicitors, Phillips Fox, enclosing the correspondence with the Dampier Port Authority, and adding some comments which are not relevant for present purposes.

16 On 28 October 2003 the plaintiff made an application to amend its reply. The material terms, for present purposes, of the amendment were to substitute subpar (e) and add subpar (f) to par 15.1. Those subparagraphs are in the following terms:

"(e) the Defendant's knowledge of the facts referred to at par 15.1(a) to (d) arose (at least) from a facsimile addressed by the Dampier Port Authority to its investigator and agent Manu Marine Pty Ltd (Manu Marine) dated 1st November 1995;

(f) the Defendant:-

(i) did not give discovery of the facsimile referred to at par 15.1(e);

(ii) served and relied upon a report from Manu Marine dated 21 September 1995 ('the fourth report') which:-

(1) inferred that the Harbour Master had not approved the usual mooring as a cyclone proof mooring;

(2) attached correspondence from the Dampier Port Authority stating that an application for approval of the usual mooring as a cyclone proof mooring, and an approval of that mooring, had not been located;

(iii) did not disclose the contents of a further report from Manu Marine dated 2 November 1995 ('the fifth report'); the fifth report:-

(1) stated that the Dampier Port Authority had approved the 'Pilbara Pilot's' usual mooring as a cyclone proof mooring;

(2) annexed the facsimile referred to at par 15.1(e);

(iv) in the premises referred to at pars 15.1(f)(i) to (iii) withheld documents which disclosed that the cases made in those paragraphs of the Defence referred to at pars 15.1(a), (b) and (d) were not fairly or reasonably advanced;

(v) in the premises referred to at par 15.1(a)-(f) has raised and persisted in a case or cases which have unreasonably increased the Plaintiff's costs of this action and of its claim under the Insurance Contract."

17 An affidavit in opposition to the application to amend the reply was sworn by a solicitor acting for the defendant on 4 November 2003 and filed and served in the proceedings. In that affidavit the solicitor said, among other things:

"8. After receiving a copy of the fifth report from Manu Marine dated 2 November 1995, Phillips Fox made further enquiries in relation to the approval status of 'PILBARA PILOT's' operational mooring

9. The additional enquiries did not disclose any evidence to substantiate that formal approval for the 'PILBARA PILOT's' operational mooring was granted by the Dampier Port Authority.

10. Further, additional enquiries were made of Captain Hammond and what he said suggested that no informal approval was granted by the Dampier Port Authority of the 'PILBARA PILOT's' usual mooring. He did not identify when, how and by whom informal approval was granted.

11. The plaintiff has not produced or referred to any admissible evidence to show that the Dampier Port Authority formally or informally approved the relevant mooring.

12. The plaintiff has not pleaded in its statement of claim that the Dampier Port Authority approved the relevant mooring, or given particulars when, how and by whom approval was given.

13. The plaintiff's solicitor has been told that Phillips Fox's enquiries found no evidence to support the suggestion that the mooring was approved at the time of the accident [there is then reference to correspondence to that effect between the solicitors annexed to the affidavit]."

18 As it turned out, the defendant did not maintain its opposition to the amendments to the reply and before the application came on for hearing the defendant's solicitors indicated that the application would not be opposed. The plaintiff was subsequently given leave to amend the reply in terms of the minute and it made those amendments.

19 The plaintiff now seeks inspection of certain documents in respect of which the defendant claims legal professional privilege. The plaintiff contends that by the letter from Phillips Fox of 3 September 2003 and the affidavit of 4 November 2003 the defendant has waived any claim of privilege.

20 The documents in question are set out in a supplementary list of documents for which privilege is claimed, verified by an affidavit sworn on behalf of the defendant on 29 November 2004. The documents in question have been itemised under the following headings:

"All documents, including correspondence, file notes, telephone notes, attendance notes, opinions, witness statements or draft witness statements relating to:

Any enquiries by Phillips Fox or its servants or agents in relation to the approval of 'Pilbara Pilot's' operational mooring made after 2 November 1995 and any answer to the above enquiry.

Any enquiries by Phillips Fox or its servants or agents of Captain Hammond after 2 November 1995 as to the approval of the 'Pilbara Pilot's' operational mooring and any answer to the above enquiry.

Any reconsideration by the defendant of the plaintiff's claim under the insurance contract in light of receipt by the defendant of Manu Marine's fifth report and/or the facsimile from the Dampier Port Authority to Manu Marine dated 1 November 1995.

The defendant's decision not to serve the 5th report.

The preparation of the affidavit discovery sworn by David Aston Bamberger on 15 May 1996."

21 The plaintiff argued that the defendant could not waive privilege over the three documents referred to in the letter of 3 September 2003 and the affidavit and at the same time maintain privilege over the documents which underpin those documents, or which go to the same issue in the proceedings. It was submitted that the effect of the waiver was not simply to waive privilege in respect of the three documents referred to, but extended to all documents that related to the approval of the Dampier Port Authority of the plaintiff's mooring. It was submitted that if a party waives privilege over some documents relating to a confined issue then privilege is waived over all documents relating to that issue. Similarly, it was argued, the statements in the affidavit as to the enquiries and responses in relation to the approval of the mooring waived privilege over documents relating to that issue.

22 The plaintiff also contended there was nothing in the defendant's affidavit of 4 November 2003 to suggest that the waiver was for a limited purpose. In any event, the waiver in the letter from Phillips Fox of 3 September 2003 was not related to the subsequent application to amend the reply.

23 The defendant argued that the plaintiff's application relied upon a misconception of the issues on the pleadings. The defendant's case, as pleaded in par 3.4 of the defence, was that it was an express term of the insurance contract that the vessel was operated strictly in accordance with all local authority statutory requirements. The regulations of the Dampier Port Authority prohibited the installation or use of a mooring unless it was approved by the Port Authority. Approval was obtained by an application on an approved form containing the prescribed information. If the Harbour Master was satisfied of certain matters he may grant approval by notice in writing to the applicant. Accordingly, approval for a mooring was given by a notice in writing. There was no scope under the regulations for an oral or informal approval. The defendant's case was that no approval had been given in accordance with the statutory requirements.

24 Counsel for the defendant said that the plaintiff, by way of reply, had raised the allegation that the defendant knew the plaintiff had approval for the mooring and that the defendant failed to act in good faith by raising the defence that the approval did not comply with the requirements of the regulations. The plaintiff had not given particulars of the allegation that the mooring was approved by the Dampier Port Authority until well after the letter of 3 September 2003 from Phillips Fox and the affidavit of 4 November 2003. In those particulars, filed and served on 23 April 2004 the plaintiff says that the application for approval was made orally by one Glenn Dawes, on behalf of the plaintiff, in or about January 1993 in a conversation with Mr James (the Assistant Harbour Master), on behalf of the Dampier Port Authority, in which Mr Dawes requested approval of the mooring of the "Pilbara Pilot" at a particular location (defined by latitude and longitude) and verbal approval was given by Mr James. That is, the plaintiff's case is that oral approval was given by Mr James on behalf of the Dampier Port Authority in January 1993.

25 Counsel for the defendant submitted that it is not to the point on the defendant's case whether or not any oral or informal approval was given. The defendant's case is that approval was not given in accordance with the regulations and the plaintiff was therefore in breach of the contract of insurance. It was common ground that the plaintiff had not obtained approval in accordance with the regulations. In par 9 of the affidavit of 4 November 2003 the deponent expressly says that the additional enquiries that had been made did not disclose evidence to substantiate that formal approval for the operational mooring was granted. Read in the context of the defence that was plainly a reference to approval pursuant to the regulations. It had nothing to do with approval in some other, unauthorised form. That statement did not therefore go to any issue in the action. No question of waiver of privilege could arise.

26 Counsel noted that the affidavit then deals in par 10 with whether any form of approval was obtained. The deponent says that when further enquiries were made of him, Captain Hammond suggested that not even informal approval had been given. That statement was included in the affidavit to found a submission that leave to amend the reply should not be allowed in the absence of some evidence that approval had been given and that, so far as the defendant could ascertain, none had been given. In a letter of 21 October 2003 the defendant's solicitors had put their objection to the minute of substituted reply in the following terms:

"Your client has not pleaded that the mooring was in fact approved. If this is your client's allegation, then it should be properly pleaded and particularised. The letter from Captain Hammond dated 1 November 1995 does not amount to evidence that the mooring was approved. Rather it simply says that Captain Hammond does not dispute the fact that the mooring was approved. This has no bearing on whether the mooring was in fact approved at the time of the accident and on our enquiries there is no evidence to support this allegation. If your client is maintaining that the mooring was approved, then that must be specifically pleaded and your client should give particulars as to when, how and by whom the approval was given."

27 I was told by counsel for the defendant - and I understand it is not in dispute - that Captain Hammond was not involved in the grant of any approval and indeed that Captain Hammond was not employed by the Dampier Port Authority at the relevant time.

28 Counsel for the defendant argued that in considering whether legal professional privilege has been waived, considerations of fairness have a role to play but the question is not one of fairness overall; it is whether there is some inconsistency in the approach of the party who discovers some material which then makes it inappropriate for the party to maintain privilege over other material. Counsel submitted that that did not arise in this case. There was nothing inconsistent in maintaining the privilege over the documents in issue.

29 Counsel submitted this case was to be distinguished from cases where reference is made to the substance or effect of advice but where the advice that is said to have that substance or effect is not revealed. Here all that had been said was that as a result of enquiries it appeared that there was no evidence of approval. There was therefore no inconsistency in the defendant's approach. It was not a case of saying that the defendant has evidence and describing the effect or substance of it; the defendant was simply saying that no evidence has been found.

30 It was also submitted that this was not a case where the only source of information provided to the defendant was through the material for which privilege was claimed. The source of the information, Captain Hammond, was available to the plaintiff. There was no suggestion that he was unwilling to talk to the plaintiff. In any event, on the plaintiff's case the approval was given orally by Mr James and Captain Hammond had no part in it. Again, there was no suggestion that Mr James was unwilling to talk to the plaintiff.

31 It was further submitted that any waiver of privilege had been for the specific and limited purpose of an interlocutory application by the plaintiff to amend the reply, in support of a contention that in the absence of any evidence from the plaintiff as to approval, no basis had been shown for the proposed amendment. Counsel for the defendant submitted that it was apparent from the affidavit of 4 November 2003 that it was sworn in opposition to the application to amend the reply. So much was expressly stated in par 3 of it. It was accordingly sworn for a limited purpose and any waiver of privilege was limited to that purpose. In addition, the affidavit ultimately was not relied on, as the amendment was not opposed.

32 Counsel for the defendant submitted in the alternative that the plaintiff's application was too wide. The affidavit of 4 November 2003, on which the plaintiff relied, referred simply to enquiries as to whether formal approval was given - and it was now common ground that it was not - and enquiries of Captain Hammond as to whether approval in any form was given. What was sought on this application was all material in the defendant's possession relating to the issue of approval, including witness statements, counsel's advice and so forth. If anything had been waived it was simply any document recording what was said by Captain Hammond which suggested that no informal approval was given.

33 It is now well established that where a party asserts the effect of privileged material or discloses part of its contents, it will usually be inconsistent for that party to refuse to disclose the associated material, or the balance of it, thereby denying the other party an opportunity of satisfying itself that what has been disclosed is a fair representation of the material relevant to the issue and that the disclosure is not misleading or unfair.

34 In Attorney-General for the Northern Territory v Maurice [1986] HCA 80; (1986) 161 CLR 475, the High Court considered a claim that there had been an implied waiver. Mason and Brennan JJ said (at 487):

" ... A litigant can of course waiver his privilege directly through intentionally disclosing protected material. He can also lose that protection through a waiver by implication. An implied waiver occurs when, by some conduct on the privilege holder's part, it becomes unfair to maintain the privilege. The holder of the privilege should not be able to abuse it by using it to create an inaccurate perception of the protected communication. ...

In order to ensure that the opposing litigant is not misled by an inaccurate perception of the disclosed communication, fairness will usually require that waiver as to one part of a protected communication should result in waiver as to the rest of the communication on that subject matter."

35 The relevant principles relating to an implied waiver of privilege were subsequently considered by the High Court in Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1. In the joint judgment of Gleeson CJ, Gaudron, Gummow and Callinan JJ the relevant principle was expressed as follows:

"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: Ross T Smyth & Co Ltd v T D Bailey, Son & Co [1940] 3 All ER 60 at 70; Larratt v Bankers & Traders Insurance Co Ltd (1941) 41 SR (NSW) 215 at 226; The Commonwealth v Verwayen (1990) 170 CLR 394 at 406, 422, 467, 472. ...

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': Goldberg v Ng [1995] HCA 39; (1995) 185 CLR 83 at 95. 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 by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large."

36 The waiver of privilege in the letter from Phillips Fox of 3 September 2003 was expressed to be in respect of three documents; the letter from Manu Marine to the Dampier Port Authority of 29 September 1995, the Dampier Port Authority's reply of 1 November 2003 and the letter from Manu Marine to Phillips Fox of 2 November 2003. The communications in those documents are self-contained in the sense that they do not refer to other documents and there is nothing to suggest that a proper understanding of them may require reference to any other document in the possession of the defendant.

37 In British American Tobacco Australia Services Ltd v Cowell [2002] VSCA 197; (2002) 7 VR 524 at 565 the Court of Appeal of Victoria said in relation to a claim that privilege over a solicitor's letter of advice had been waived by reference to it in another letter of advice in respect of which privilege had been waived:

"A reference in one letter of advice to an earlier letter of advice does not expose the latter to scrutiny by the other party to litigation merely because legal professional privilege is waived in relation to the former: implied waiver is not so generous a doctrine. As we apprehend it, where legal professional privilege is waived in relation to one piece (or part) of advice, the privilege is impliedly waived in relation to another if - and only if - that other is necessary to a proper understanding of the first. As established by the High Court (at least since Mann v Carnell [footnote omitted]) the test in such cases [footnote omitted] is whether it would be 'inconsistent' for a party to rely upon, and so to waive legal professional privilege in respect of, the one without also being taken to have waived privilege in respect of the other [footnote omitted]. For example, there is no such inconsistency in waiving privilege in relation to the Clayton Utz letter of 7 July 1992 and maintaining privilege in relation to the 'advice ... previously provided in December 1985': [footnote omitted] it may be a matter for adverse comment, but it is not a matter of implied waiver. The letter of 7 July 1992 was complete in itself and there was no need to make reference to the earlier advice in order to properly understand the letter of 7 July 1992."

38 In the same way, in my view, in the present case there has been no waiver of privilege by the defendant beyond that in respect of the three specific documents referred to in the letter of 3 September 2003.

39 The question then is whether by the affidavit of 4 November 2003 there was any implied waiver of privilege by the defendant in respect of the documents set out in the defendant's list of documents of 29 November 2004.

40 The affidavit was said to give rise to an implied waiver in two respects. First, in relation to the further enquiries made by Phillips Fox after 2 November 1995, which enquiries, it was said by the defendant's solicitors, failed to disclose any evidence to substantiate that formal approval was given for the "Pilbara Pilot's" operational mooring; and secondly, in relation to the further enquiries made of Captain Hammond, in response to which, it was said by the defendant's solicitors, Captain Hammond suggested that no informal approval was given for the "Pilbara Pilot's" usual mooring. The plaintiff says that the defendant has waived privilege, among other things, over all documents relating to those enquiries and any answers to them.

41 I do not accept that it is necessarily an answer to an application of the present sort that it is open to the applicant for inspection to take its own statement on the matter from the witness referred to in the document in question. It is, of course, a trite principle that there is no property in a witness. In Harmony Shipping Co v Saudi Europe Line [1979] 1 WLR 1380, Lord Denning (at 1384) explained that that is because the primary duty of the Court is to ascertain the truth and no party is entitled to preclude another party from seeking to adduce the evidence of any witness who can assist the Court in doing that.

42 But here the defendant has represented the effect of what Captain Hammond said to its representatives. What is at issue, therefore, is what Captain Hammond said at that time to those representatives. What Captain Hammond, if asked, might be prepared to say on the topic to representatives of the plaintiff is another matter. Nor in my view is it determinative that the plaintiff says by its particulars of the reply that it was Mr James, not Captain Hammond, who gave the informal approval. The import of what is attributed to Captain Hammond, presumably on the basis of some enquiries by him and examination of the Dampier Port Authority's records, is that no informal approval was given by anyone on behalf of the Authority.

43 I do not accept, however, that any question of an implied waiver arises in respect of documents relating to enquiries as to whether "formal" approval was given for the mooring. I would not have thought there was any doubt that, in the context of this case, the "formal" approval mentioned in the affidavit referred to approval given pursuant to the regulations. As counsel for the defendant pointed out, the plaintiff does not contend that it obtained approval pursuant to the regulations. It pleads that the approval was sought and given orally. Any enquiries or answers in relation to whether any formal approval was given do not, therefore, go to an issue in the action and accordingly there can be no question of inconsistency on the part of plaintiff in maintaining privilege over them.

44 The questions of whether or not any informal approval had been given, and, if it had, when the defendant became aware of that, do, however, go to issues raised by the reply. Indeed, as it appears, the affidavit was filed to support a submission by the defendant that there was no basis for the amendments that the plaintiff sought to make to the reply in relation to an informal approval having been obtained. It is necessary then to determine whether there has been any implied waiver in respect of documents relating to those enquiries and, if there has, whether the waiver was limited to the interlocutory application to amend the reply.

45 I do not accept the defendant's submission that there could be no waiver of privilege because the effect of the statement in par 10 of the affidavit is not to describe the substance or effect of the response to the enquiries but simply to say that no evidence was found. The statement in par 10 is a reference to the substantive effect of a communication by Captain Hammond in relation to whether informal approval had been given. A communication that "suggested that no informal approval was granted" is plainly significant in the context of the pleaded issues.

46 The question then is whether the conduct of the defendant in making that statement is inconsistent with the maintenance of confidentiality in any documents relating to those enquiries or any response to them.

47 I do not think there is now any doubt that a party may waive privilege for a limited purpose: Goldberg v Ng [1995] HCA 39; (1995) 185 CLR 83 at 95 - 96; Goldman v Hesper [1988] 1 WLR 1238; State Bank of South Australia v Smoothdale No 2 Ltd, unreported, FCt SCt of South Australia, 2 June 1995; British American Tobacco Australia Services Ltd v Cowell [2003] VSCA 43 at [15]. Such a limitation on a waiver of privilege is not restricted to a voluntary or express waiver but may apply to an implied waiver: British American Tobacco Australia Services Ltd v Cowell (supra) at [15 - 17].

48 As I understand the defendant's argument, it is that, as any waiver of privilege constituted by the contents of the affidavit was for the limited purpose of the interlocutory application to amend the reply, there is no inconsistency in the defendant maintaining privilege over any documents relating to the enquiries. At the time of the application to amend the reply no point was taken by the plaintiff that there was any implied waiver of privilege and the application in which the defendant's affidavit was filed ultimately was not opposed. The occasion for which any waiver occurred has passed; or rather it never came to pass, as the defendant abandoned its opposition to the amendment and the amendment was made. As the purpose for which the affidavit was served is no longer relevant, no question of inconsistency can now arise.

49 It is the case that the deponent to the affidavit expressly deposes to the fact that the affidavit is sworn in opposition to the plaintiff's application to amend the reply. It was for the purposes of that application that the statements alleged to give rise to the waiver were put forward by the defendant. There is, however, no express limitation on any waiver of privilege constituted by the contents of the affidavit and nor does it appear that anything was said to suggest that any waiver was limited to that purpose. The question of the informal approval, and the state of the defendant's knowledge of it, go to live issues on the pleadings and those issues remain matters to be determined at trial. Whether, as the defendant's counsel contended, the matters pleaded in the reply are relevant, if at all, only to costs, is not a matter for determination on this application. It is sufficient for present purposes that the issues raised in the reply remain live for trial.

50 In Australian Competition & Consumer Commission v Australian Safeway Stores Pty Ltd (1998) 81 FCR 526 the question of waiver fell to be determined under the Evidence Act (Cth), but by way of obiter Goldberg J said [at 571] in relation to the common law principles:

"The scope of fairness is not to be limited to the duration of the interlocutory proceeding in which the issue of waiver arises. The issue of fairness arises whenever it can be said that a party is left with an incomplete version of an event which may become relevant or an issue later in the proceedings."

51 Counsel for the plaintiff argued that in this case failure to disclose the balance of the documents relating to approval of the mooring would leave the plaintiff with an incomplete version of events in respect of an issue which was live on the pleadings.

52 I do not consider that in the present case the question of waiver can be quarantined to the application to amend the reply. In my view what was said by Goldberg J in Australian Competition & Consumer Commission v Australian Safeway Stores Pty Ltd v Australian Safeway Stores (supra), albeit recognising that the test is now one of inconsistency, is apposite. The defendant made the statements as to the effect of what Captain Hammond said in order to oppose an amendment to the plaintiff's reply on the ground that the proposed amendment had no basis in fact and therefore could not succeed at trial. The opposition was not pressed, with the result that the amendment was made and the issue of whether informal approval was obtained - and if so, what was the defendant's knowledge of it - remains live for trial.

53 In the circumstances, it would, in my view, be inconsistent in the sense used in Mann v Carnell (supra) for the defendant, having disclosed in par 10 of the affidavit of 4 November 2003 what it says is the substance of Captain Hammond's statements as to whether any informal approval was given for the plaintiff's mooring, to fail to disclose the documents which record the enquiries made of Captain Hammond and the response by Captain Hammond referred to in par 10 of the affidavit. In my view, the defendant has waived privilege in respect of any such documents.

54 I do not, however, accept that the waiver extends so far as claimed by the plaintiff and, in particular, I do not consider that it goes to documents relating to enquiries and responses after those referred to in the affidavit of 4 November 2003 or enquiries and responses beyond those referred to in the affidavit.

55 In addition, in my view, no basis has been made out for the plaintiff's contention that the defendant has waived privilege in relation to documents relating to the other categories in respect of which inspection is sought, namely, any reconsideration by the defendant of the plaintiff's claim under the insurance contract in light of receipt by the defendant of Manu Marine's fifth report and/or the facsimile from the Dampier Port Authority to Manu Marine dated 1 November 1995, the defendant's decision not to serve the fifth report or the preparation of the affidavit discovery sworn by David Astin Bamberger on 15 May 1996. Those matters extend well beyond any waiver that might be implied by the letter of 3 September 2003 or the affidavit of 4 November 2003.

56 I would therefore order that the defendant produce for inspection any documents which record (but only to the extent they record) the enquiries made of Captain Hammond and any response by Captain Hammond referred to in par 10 of the affidavit, and would otherwise dismiss the application.

57 I will hear the parties on the precise form of orders and on costs.

Port Authority Act 1985

Port Authority Regulations 1989

Information Act 1992

Allison Pty Ltd (Acn 056 940 437) t/a Pilbara Marine Port Services v Lumley General Insurance Ltd [2005] WASC 37

At a glance

Court

Decision date

Catchwords

Source

Catchwords

Judgment (114 paragraphs)

Allison Pty Ltd (Acn 056 940 437) t/a Pilbara Marine Port Services v Lumley General Insurance Ltd [2005] WASC 37 (11 March 2005)

Parties

Legislation Cited (3)

Cases Cited (10)