CONSIDERATION
16 The parties' submissions cited and discussed many authorities on waiver of privilege. Senior counsel for the applicant referred to the criticisms made by Allsop J in DSE (Holdings) Pty Ltd v Intertan Inc (2003) 127 FCR 499 ('DSE') of the view expressed by the majority of the Full Court of this Court in Telstra Corporation Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152 ('Telstra'). His Honour said (at [5]) that his own view was that Mann v Carnell (1999) 201 CLR 1 ('Mann v Carnell') at [27] and [29] did not just modify, but rejected, the approach which had been taken by the majority in Telstra. He considered that the Mann v Carnell test of waiver, namely, inconsistency as between the conduct of the holder of the privilege and the maintenance of the privilege (informed, where relevant, by notions of fairness) worked 'a narrower and more confined operation for implied waiver than as expressed by the majority in Telstra'. Allsop J said, however, that he was able to resolve the privilege issue before him conformably with the view of the majority in Telstra, but also 'strongly informed by the principle in Mann v Carnell' (at [6]).
17 In the recent case of Collins Debden Pty Ltd v Cumberland Stationery Pty Ltd [2005] FCA 1194, I applied the 'inconsistency, where necessary informed by considerations of fairness' test of waiver of privilege referred to in Mann v Carnell. That case, like Mann v Carnell itself, but unlike Telstra, DSE and the present case, was not a 'putting a state of mind in issue' case.
18 The respondent submits that I should not regard myself bound to follow the Full Court in Telstra. With due respect to this submission, like Allsop J in DSE, I can resolve the issue requiring resolution consistently with Telstra. Therefore, I will not embark on a discussion of the various authorities to which I was referred. For example, I do not find it necessary to address the interesting discussion of 'putting a state of mind in issue' kind of waiver by Byrne J in Liquorland (Australia) Pty Ltd v Anghie (2003) 7 VR 27 and by Redlich J in Anderson v Holding Redlich & Ors [2003] VSC 303, to which senior counsel for the respondent referred.
19 In Telstra, Branson and Lehane JJ said (at 166-167):
'Where, as in this case, a party pleads that he or she undertook certain action "in reliance on" a particular representation made by another, he or she opens up as an element of his or her cause of action, the issue of his or her state of mind at the time that he or she undertook such action. The court will be required to determine what was the factor, or what were factors, which influenced the mind of the party so as to induce him or her to act in that way. That is, the party puts in issue in the proceeding a matter which can not fairly be assessed without examination of relevant legal advice, if any, received by that party. In such circumstances, the party, by putting in contest the issue of his or her reliance, is to be taken as having consented to the use of relevant privileged material, or to put it another way, to have waived reliance on the privilege which such material would otherwise attract.'
Later, their Honours said (at 167):
'..., the conduct of a party which leads to the implication of consent to the use of otherwise privileged material, or to an implied waiver of such privilege, in undue influence cases, legal professional negligence cases and, in my [sic - our] view, the "state of mind" cases, is that of raising for determination in legal proceedings, as an element in the cause of action relied upon, an issue incapable of fair resolution without reference to that material.'
Finally, they said (at 167-168):
'It is unnecessary and inappropriate, having said those things, to attempt to define exhaustively the scope of the principle. Where, however, a party relies on a cause of action, an element of which is the party's state of mind (including the quality of the party's assent to a transaction) the party is taken to have waived privilege in respect of legal advice which the party had, before or at the time of the relevant events, material to the formation of that state of mind.'
20 Importantly, in its written and oral submissions, the respondent identifies the relevant state of mind of the applicant as his unawareness of the Government's proposal to amend of the IR Act by introducing the remuneration cap. However, the Pleading does not expressly or implicitly plead that unawareness: it does not put that state of mind in issue.
21 Paragraph 54 of the Pleading asserts an alternative causation of loss arising from the respondent's non-disclosure. According to para 54, if the respondent had not engaged in the misleading and deceptive concealment alleged, it would, as a matter of fact, have disclosed its thinking in relation to the applicant's future with it promptly, and that would have been by 24 June 2002, the date on which the amendments to the IR Act took effect. The applicant's state of mind in relation to the Government's proposal to amend the IR Act is irrelevant to this allegation. Likewise, it is irrelevant to the further allegations in para 54 that the applicant would have obtained legal advice, applied to the Commission and obtained an order of a certain kind in his favour.
22 The irrelevance to the applicant's pleaded case of his unawareness of the proposal to amend the IR Act can also be demonstrated by inquiring what the position would have been if he had known of it. Paragraph 54 of the Pleading would have remained exactly the same. The applicant's case would have remained the respondent's conduct in lulling him into a false sense of security meant that he was not prompted to seek legal advice and apply for and obtain an order under s 106 of the IR Act.
23 The same position obtains if the relevant state of mind of the applicant relied on by the respondent is identified as incorporating unawareness of the remedy available under s 106. Assume, indeed, that on 20 May 2005 his solicitors advised the applicant about both s 106 and the foreshadowed remuneration cap. His case as pleaded in para 54 would remain the same: he relied on the respondent's misleading reassurances and non-disclosure and, as a result, did not take the steps mentioned.
24 The applicant's case is that although he had some concerns, he felt reassured by the respondent's positive statements and non-disclosure. It is neither inconsistent nor unfair that he pursue that case while maintaining his privilege in respect of documents recording the communications referred to.
25 It is conceivable that the course of evidence on the hearing will result in a waiver of the privilege and, of course, always it remains open to the respondent to renew its application for access to the documents in question.
26 For the above reasons, and without reference to the other submissions made by the respondent, I do not accept the respondent's submission of waiver of privilege in relation to the communications between the applicant and his lawyers in the period from 1 March 2002 to 24 July 2002 regarding his employment with the respondent.
27 The respondent submits that the terms of engagement are not privileged at all because usually they do not record the substance of the advice given or of the advice sought. I think, however, that they are likely to reveal at least the general nature of the issue or subject on which advice was sought, and that the applicant is entitled to the benefit of the privilege in relation to them.