Attorney-General (Northern Territory) v Maurice

Gleeson CJ in Benecke (at 111) said: "It would be inconsistent with the reason for the existence of the privilege to permit it to operate in the manner for which the appellant contends. But for her own actions, the privilege would have enabled the appellant to insist that nobody should be able to give evidence of the confidential communications between the appellant and her senior counsel about the settlement of the first proceedings, without the consent of the appellant. However, it did not enable the appellant to make public her version of those communications and, at the same time, to enforce silence on the part of others who disagreed with that version. The law permits the search for truth in legal proceedings to yield, in certain circumstances, to the public interest in preserving the secrecy of communications between lawyer and client. In the present case, however, the appellant herself lifted the veil of secrecy by giving her version of the communications." (Emphasis added) Benecke was a relatively clear case of imputed waiver because the contents of her communications with Counsel had been directly put in issue by Mrs Benecke and the terms of her alleged instructions had been disclosed by her as an essential part of her case. In Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405 Giles CJ in the Commercial Division, in relation to discovery, had to consider whether legal professional privilege continued to apply where an issue was raised as to the state of mind of a party in circumstances where that legal advice was likely to have contributed to that party's state of mind. At 411 his Honour said: "Confining attention to the allegation made by GPG Nominees and Allied ..., having exposed to scrutiny their corporate states of mind, being states of mind to which their legal advice is likely to have contributed, GPG Nominees and Allied can not withhold the advice from their opponent. I emphasise that the legal advice is likely to have contributed to the states of mind of GPG Nominees and Allied ... were that not so, the principle may not have applied." This is the principle which the respondents contend should apply in relation to the present application. In a subsequent dispute as to privilege in Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1996) 40 NSWLR 12, Rolfe J had to consider whether, in relation to s 122 of the Evidence Act, a party had knowingly and voluntarily disclosed the substance of material, which had attracted legal professional privilege. In the course of his reasons, his Honour drew a distinction between a statement in a Part B Statement, on the one hand, that: "On the basis of legal advice received Ampolex believes that it will be successful in the .... litigation ...." (Emphasis added) which was held not to disclose the substance or effect of the legal advice, and a statement that: "There is a dispute about the conversion ratio. Ampolex maintains that the correct ratio is 1:1 and has legal advice supporting this position." (Emphasis added) which was held to disclose the effect of the legal advice and thereby waive the privilege. On a stay application made to the High Court in Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1996) 70 ALJR 603, Kirby J, in refusing the stay, and summarising the relevant principles, said at 607: "I agree that a mere reference to the existence of legal advice would not amount to a waiver of its contents. Rolfe J appears to have acknowledged this distinction by later rulings to which I was taken during the course of argument. But at least in respect of the substance of the legal advice supporting Ampolex's assertion about the correct ratio, which is in contest here, it is strongly arguable that the public reference to the supporting legal advice, waived the privilege as to the precise content of the legal advice on that point." (Emphasis added) The above statements, made in the relation to s 122 of the Evidence Act, hark back to the common law principles of waiver or privilege, as set out in Maurice, where the individual judgments indicated that a mere reference to or use of privileged material to formulate a statement would not taken alone amount to waiver: 161 CLR per Gibbs CJ at 481, per Mason and Brennan JJ at 488, per Deane J at 493 and per Dawson J at 497. In the course of submissions reference was made to a decision by Cowdroy AJ in Westpac Property Investments Pty Ltd v City West Apartments Pty Ltd (unreported, 20 December 1996, Supreme Court of New South Wales, Equity Division). His Honour there observed that the Evidence Act sought to establish a code relating to circumstances in which confidential communications could be adduced in evidence. He referred to the circumstances in which a waiver of such privilege could arise as set out in ss 121-126 inclusive. He pointed out that there was no provision which dealt with the circumstances in which the state of mind of a party has been raised as an issue arising out of confidential communications between a party and his solicitor and where objection is taken to the giving of such evidence. His Honour considered that the decision of Giles CJ in Ampolex did not apply to the case before him because the provisions of the Evidence Act were not then applicable. His Honour considered that the provisions of the Act must prevail. He concluded that the paragraph of the pleadings relied on as a waiver was not sufficient to constitute a direct or implied waiver of the defendant's privilege within the principles set out in Maurice. In the present case, it is not necessary to consider whether the Evidence Act provides an exclusive code as to waiver of privilege because, for reasons set out below, neither the pleadings nor the specific evidence relied on by the respondents amount to a waiver of privilege or a consent to disclosure of the material. It can be said however, that where there is a conflict between the common law and the Evidence Act thestatute must prevail. This is clearly so in relation to the"dominant purpose" test which will prevail over the previous "sole purpose" test in situations where the Act applies. I now turn to a consideration of the specific matters relied on by the respondents to support the contention that privilege has been waived. The respondents' case The respondents submit that the first applicant has put in issue her mental state, expertise, knowledge, or lack of access to advice, and has therefore waived any privilege attaching to otherwise privileged documents which might possibly relate to these matters. Counsel points to a number of matters in the Statement of Claim and the evidence filed by the applicants which are said to raise issues which in fairness call for an open and informed investigation as to the nature and substance of privileged material. The first matter pointed to is set out in par 62 of the Amended Statement of Claim ("ASC") which reads : "DAMAGES 62. In the premises, as a result of the said: (a) misleading or deceptive conduct; and/or .... (g) supply of a defective and unreasonably dangerous heart valve, the late 'KA' and each of the Applicants herein has suffered, and in the case of each of the Applicants, continues to suffer injury, loss and damage. PARTICULARS ....... (b) In respect of the Applicants herein, such injury loss and damage includes: (i) .... (ii) loss of financial support and services of the late 'KA'. (iii)loss of the society, care, comfort, advice, counsel, affection support and solace of the late 'KA'. (iv)extreme shock and emotional distress arising out of the death of the late 'KA' The respondents also rely on specific passages in the Statement of Evidence made by the first applicant, dated 10 April 1997. These are:

"100. I the period following 'KA's death I consulted with bank managers with whom 'KA' had regular and detailed dealings and who I assumed had greater knowledge of 'KA's affairs than I did. I requested their assistance and advice. As I was inexperienced in meeting with bank managers and was emotionally extremely fragile, I asked a friend to attend with me to provide some moral support. 104. I was unable to proceed with such developments of this property or to oversee the operations at the Wiseman's Ferry Road property because I was emotionally distraught, and had a newborn and 2 infant children to care for. Also, I did not have the relevant financial and business experience knowledge or expertise which 'KA' possessed and which such developments/proposals required. I was under a great deal of emotional stress as a result of 'KA's death. The grief suffered by my parents and parents-in-law resulting from 'KA's death added significantly to the emotional stress I was already suffering. I did not have spare money with which I could engage the services of consultants to assist in the marketing particularly of the Blakers Road property. 105. I requested a long standing family friend to contact a company which he ascertained was looking for a Sydney landfill site on my behalf. After getting an inspection of the property, the company sought from me a confidentiality agreement and entered into an option agreement. I sought advice from 'KA's solicitors to review this company's proposed confidentiality and option agreement. The solicitor attended at subsequent meetings but was able to assist in matters of law only. With the demands of the bank and solicitors costs I did not have the financial resources to engage an expert to assist in negotiating the sale of the property. 135. The bank's litigation against me dragged my children and me into additional two and half years of considerable stress and anxiety over and above that I already felt through the loss of 'KA', adjustment to and a responsibility for a baby coping with single parenting of our three infant daughters and the necessity for litigation in respect of the wrongful death of 'KA'. 150. I was emotionally very fragile and such vulnerability affected my capacity to continue in the banking litigation. In February, 1996 the ANZ matter was settled out of Court. This involved handing over possession of the two Maroota properties and paying $570,000.00 to the bank. I obtained a loan from my mother to pay the money. To be able to lend me the money she had to sell off various investments." Further, reliance is also placed on statements made in the following extracts from the Statement of Evidence of Mr David Watt, a chartered accountant and expert witness, dated 27 March 1997, filed in the applicants' case. "16.18 25 July 1990 - the Deceased wrote to Ferrier Hodgson & Co setting out briefing notes for a meeting to be held on 30 July 1990. The briefing notes outlined the potential business development of the Blakers Road Property and referred to discussions with Mr Bill Kruger of the National Consulting Group at which a value in the order of $4 million had been discussed. 16.19 1 August 1990 - the Deceased instructed Mr Ian Ferrier of Ferrier Hodgson & Co to proceed with a valuation of the Blakers Road Property. 16.20 The draft report prepared by Ferrier Hodgson & Co, referred to in their correspondence addressed to the Plaintiff and dated 3 October 1990, indicated that a valuation of $3 million was "justifiable". ..... 17 Realisation of the Maroota Properties 17.1 On 20 October 1989, the ANZ Bank wrote to the Deceased indicating that whilst the bank was prepared to capitalise the interest on the Fully Drawn Advances it was expected that the Blakers Road Property be placed on the market for sale. 17.2 On 8 January 1990, the ANZ Bank wrote to the Deceased emphasising that the bank expected the finance arrangements be cleared in full. 17.3 It is apparent from the comments in paragraphs 16.18 to 16.20 above, that at the time of his death, the Deceased was contemplating the sale of the Blakers Road Property. ....... 17.5 It is our view that, but for the death of the Deceased, the Maroota Properties should have and would have been sold in or around 1990 in order to reduce the level of debt which had reached a level where it was not serviceable, i.e. the Deceased could not have met the interest on this level of debt. 17.6 We are instructed that the Plaintiff was unable to proceed with the development of the Blakers Road Property or oversee the operations at the Wisemans Ferry Road Property because: (i) the Plaintiff does not have the relevant experience, knowledge and expertise in dealing with the development proposals. All property transactions were handled by the Deceased; (ii) the Plaintiff was placed under a great deal of emotional stress as a result of the death of her husband; (iii) the Plaintiff had 3 young children to look after. The youngest of which was born in September 1990; (iv) the Plaintiff was placed under a great deal of emotional stress as a result of the grief suffered by her parents and her parents-in-law as a result of the death of her husband; (v) the Plaintiff does not have financial and business experience and expertise; (vi) the Plaintiff did not have any cashflow from which she could engage the services of consultants to assist in the marketing of the Maroota Properties." The respondents submit that the above material puts in issue the state of mind, knowledge and experience of the first applicant and the intentions of her deceased husband. It is said to be abundantly clear that the first applicant has put in issue her lack of expertise and her inability to obtain business advice and that this entitles the respondents as a matter of fairness to have access to all information or advice available to her including legal advice to test whether she really lacked expertise or not. The respondents submit that the applicants are claiming in the proceedings the value of the Maroota properties. This claim is said to be that the applicants are entitled to an amount of about $2.9 million as a result of the death of the first applicant's husband because she was, practically speaking, forced into a settlement which was improvident. In addition to the sum of $2.9 million the applicants seek to add interest. As a result the claim arising from the settlement with the ANZ Banking Group, to which the documents sought are said to be relevant, and which resulted in the disposal of those properties, constitutes the largest component of the applicants' claim for compensatory damages. Waiver In my view par 62 of the ASC and the particulars furnished do not amount to an implied waiver of the privilege. The paragraph alleges that as a result of the supply of the defective heart valve the applicants have suffered loss and damage and that their claim includes loss of financial support and services of the deceased; loss of the advice, counsel, and support of the deceased, and shock arising out of the death of the deceased. The paragraph does not raise a question directly or indirectly which would warrant a conclusion that there has been a waiver of privilege in relation to the files of the solicitors and in particular communications to and from those solicitors, the applicants, and the ANZ Banking Group. Nor, in my view, do the paragraphs referred to from the Statement of Evidence justify a conclusion that there has been an implied waiver so as to warrant, on the grounds of fairness, making available of the privileged advices. Paragraph 100 of the first applicant's statement asserts that, following her husband's death, she consulted with bank managers who knew more about her husband's dealings than she did. She requested assistance. She was inexperienced with bank matters and was emotionally extremely fragile. There is nothing in the reference to fragility and vulnerability to disclose the substance of legal advice nor is there any suggestion of the lack of legal advice. This paragraph whether taken alone or in conjunction with the subsequent paragraphs, does not in any way disclose the nature or substance or effect of legal advice and communications with solicitors as issues. Paragraph 104 refers to the applicant being emotionally distraught and asserts that she did not have the relevant financial and business experience, which her husband possessed. She refers to her emotional stress and being unable to engage the services of consultants to assist in the marketing of one of the relevant properties which had been sold. It is said that she sought advice from her husband's solicitors (Mallesons) to review a confidentiality agreement. The solicitor was able to assist in matters of law only. These assertions do not in any way involve the disclosure of advice from discussions with and communications to and from the solicitors Mallesons. The suggestion that she could not get business advice from her solicitor does not disclose or put in issue the legal advice so as to require the solicitors' file to be made available as a matter of fairness. Nor does the material establish that any legal advice formed the basis for her anxiety. It is not said that the legal advice or lack of it lead to her anxiety and fragile emotional state. The respondents also refer to par 135 which concerns her stress as a result of the ANZ Banking Group litigation. Again, this cannot in any way justify a disclosure of privileged material. In par 150 of her statement she again refers to emotional fragility and vulnerability affecting her capability to continue in the banking litigation. Again, this does not support the suggestion that privilege as a matter of fairness should be taken to have been waived by her In further support of the implied waiver, reliance is placed on the report of Mr David Watt of Horwath Services, Management Consultants and Chartered Accountants, in relation to damages and valuation. In relation to the intentions of the deceased, par 17.3 of that Statement, which is relied on, simply asserts that at the time of his death, the deceased was contemplating the sale of the Blakers Road property. This statement is a conclusion expressly stated to have been drawn from specific documents not involving lawyers. There is a specific reference to pars 16.18 to 16.20, inclusive. This material cannot support an inference of waiver in relation to legal advice given to the deceased. Paragraph 17.6 of Mr Watt's statement is quoted earlier. It refers to instructions given to Mr Watt. It says these instructions are to the effect that the applicant did not have experience, knowledge and expertise in dealing with development proposals as these were handled by the deceased. It refers to the emotional distress of the deceased and to her lack of financial and business expertise. This reference to instructions in the Accountant's Report does not, in my view, disclose or sufficiently relate to any legal advice as to amount to a waiver on behalf of the first applicant so as to warrant access being granted to the files of her solicitors, either Mallesons or Henry Davis York. It is too remote. In summary, none of the specific references whether considered in isolation or cumulatively amount to waiver. Accordingly, insofar as the respondents rely on the submissions as to the mental state and lack of expertise of the first applicant, as an implied waiver, I do not accept this submission. These documents need not be produced on this basis. Legal Aid - costs Access is sought to Legal Aid Commission documents. The Legal Aid Commission Act 1979 (NSW) in s 25 provides: "(1) The relationship arising by virtue of this Act between a solicitor ... and an applicant for legal aid ... shall be the relationship as between a solicitor acting in his professional capacity and in the course of his professional employment and his own client. ...... (2) The like privileges as those of which arise from the relationship of a solicitor acting in his professional capacity ... and his own client shall arise between the Commission ... and an applicant for legal aid ... (3) Without affecting the generality of subsection (1) or (2), the Commission, ... is not required to divulge to any person or court any information or document (including an application for legal aid) relating to the administration of legal aid." (Emphasis added) Subsection (4)(k) of s 25 provides that nothing in the above subsections applies in respect of:

" the divulging of information obtained from a person, with the consent of that person..." (Emphasis added) The respondents submit that the first applicant has "consented", perhaps indirectly, to the divulging of information by the Legal Aid Commission because as part of her claim she seeks to recover from them an amount of costs which the Commission is said to be presently claiming back from her. In my opinion, the Legal Aid documents come within s 25(3). The exception in s 25(4)(k) requires consent and in my view no consent express or implied to divulging information has been given by any of the applicants. The claiming of legal aid costs does not, in my view, rise to the level of a consent to the divulging of information provided by the first applicant within that paragraph. Evidence Act 1995 The respondents also rely on the provisions of the Evidence Act. Part 3.10 of the Evidence Act is concerned with "Client legal privilege". Section 118 provides that : "118. 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 or a lawyer; for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client." Section 119 provides that: "119. Evidence is not to be adduced, if on objection by a client, the court finds that adducing the evidence will 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 ... that was prepared; for the dominant purpose of the client being provided with professional legal services relating to [a] ... proceeding, or an anticipated ... proceeding, in which the client is ... a party." There are differing judgments as to whether the above sections are confined to the tendering of evidence on a hearing or whether they are sufficiently extensive to include preliminary procedural matters leading up to a hearing. In my opinion, both logical and practical considerations lead to the conclusion that the rights conferred by these sections should be taken to apply to preliminary and incidental procedures leading up to a hearing as well as to the hearing of testimony and evidence at trial. This view was taken by Branson J of this Court in Trade Practices Commission v Port Adelaide Wool Co Pty Ltd (1995) 132 ALR 645 and was applied by McLelland CJ in Equity in the Supreme Court of New South Wales in Telstra Corp Ltd v Australis Media Holdings Pty Ltd (unreported, 20 February 1997). In that decision his Honour observed at 2-4 that: "TheEvidence Act principles are expressed in the Act to apply to the adducing of evidence, and this expression does not in its ordinary and natural meaning extend to ancillary processes. ...... Although as a matter of construction the Act has no direct application to ancillary processes, nevertheless in my opinion the enactment of the Evidence Act principles in respect of the adducing of evidence at a hearing has resulted, as an indirect or flow-on effect, in the application of equivalent principles to all ancillary processes. ...... If principles of client legal privilege ... applicable to the adducing of evidence were to differ from those applicable to ancillary processes, the consequences would be anomalous, conducive to confusion and disorder in the preparations for and conduct of proceedings, and verging on the absurd. The adducing of evidence at a hearing and ancillary processes are functionally linked."

The respondents rely on a number of provisions in Part 3.10 to justify access to the documents. The first is s 121(3) of the Evidence Act which provides that the client legal privilege provisions of the Act do not prevent the adducing of evidence of a privileged communication if the communication affects the rights of a person. In my view, in the present case, the legal advice and communication cannot be said, on the material before me, to affect the rights of a person. Examples of such situations where material might satisfy such a description are defamatory statements, a contractual offer, an acceptance of an offer or exercise of an option or statements which constitute a binding election or waiver. Reliance is also placed on s 122 which states that privileged provisions do not prevent the adducing of evidence given with the consent of the client or party concerned, nor do they prevent the adducing of evidence where a client or party has knowingly and voluntarily disclosed to another person the substance of the evidence. In my view, for the reasons given above in relation to waiver, I do not consider there has been any knowing or voluntary disclosure of the substance of the material by or on behalf of the applicants. The respondents also rely on s 131(2) of the Evidence Act which sets out exceptions to the privilege conferred by s 131(1) which provides that evidence is not to be adduced of a communication between parties in dispute, or with third parties in connection with an attempt to negotiate a settlement or a document prepared in connection with an attempt to negotiate a settlement. The specific exceptions referred to are those contained in s 131(2)(f), (g) and (h). In my view par (f) does not apply because the making of the settlement agreement is not in issue in the present proceedings. There is an agreement. It has been made. There is no issue on this question. In relation to par (g), the material placed before me does not indicate that the Court may be misled in this proceeding unless evidence of any specific communication or document is adduced to contradict or qualify the applicant's evidence. Any assumption to this effect is purely speculative. This claim for access is based only on a possibility that there may be some material to support an allegation that the Court may be misled. Paragraph (h) refers to an exception where the communication of or documents are relevant to determining liability for costs. In my view, this exception applies in the present case because, as I understand the position, the applicants are claiming as part of their damages, costs incurred in relation to the litigation with the ANZ Banking Group. Therefore communications or documents which are relevant to determining the liability of the applicants for such costs are outside the privilege conferred by s 131 of the Evidence Act. However, in relation to documents in the possession or control of the Legal Aid Commission, in my opinion this exception cannot require production because the privilege attracted by those documents is that conferred by s 25 of the Legal Aid Commission Act and this is not affected by s 131(2)(h) of the Evidence Act. In addition, by claiming costs as damages there has been an implied waiver under the Maurice principles. The consequence is that with the exception of documents in the possession or under the control of the Legal Aid Commission the respondents are not entitled to have access to documents in the possession or control of other persons except insofar as they relate to the liability and quantum of costs claimed as damages by the applicants. Conclusion For the reasons given above, it is my view, on the material presently before me, that the respondents have not made out a sufficient case for access to the documents produced on subpoena, except to the limited extent concerning costs in respect of documents held by persons other than the Legal Aid Commission. Such access should be granted only to the extent that the documents or communications concern liability for costs claimed as damages in the proceedings. As the applicants have been substantially successful in resisting the claim for access, the respondent should pay their costs of this Notice Of Motion. I certify that this and the preceding thirteen (13) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin

Solicitor for the Respondent: Freehill Hollingdale & Page

Date of Hearing: 27 June 1997 and 4 July 1997