Carbone v 4 foage Ltd,

Carbone v 4 foage Ltd, - [1910] HCA 11 - HCA 1910 case summary — Zoe

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lawyer or other legal adviser at Melbourne, Sydney or else- where any and what advice as to the liability of the plaintiff and - or what other persons in respect to the alleged sale of the steamship Peregrine by the defendants to the plaintiff?" The defendants objected to answer the question, on the ground of privilege, and the Supreme Court of Victoria held that the objection was good. The point is taken now that the objection of privilege does not apply to a case of fraud, or intended fraud, or of intended crime. I am not sure that the exception has ever been extended beyond these two cases. But I am sure that it has never been held to apply to a case where all that is alleged is that the evidence will show that the plaintiff knew he had nota good cause of action. The rule was laid down very distinctly by Lord Hals- bury L.C. in Bullivant v. The Attorney-General for Victoria (1): "I think the broad propositions may be very simply stated: for the perfect administration of justice, and for the protection of the con- fidence which exists between a solicitor and his client, it has been established as a principle of public policy that those confidential communications shall not be subject to production. But to that, of course, this limitation has been put, and justly put, that no Court can be called upon to protect communications which are in themselves parts of a criminal or unlawful proceeding." The rule is very well illustrated in the case of R. v. Cox and Railton (2), in which the communication stated and put in evidence was a com- munication made by a solicitor to his client for the purpose of enabling him to carry out an unlawful enterprise. In the present case the supposed communication inquired into is one made by the solicitor before the enterprise was commenced. How can that be said to be part of a criminal or unlawful proceeding? There is nothing criminal or unlawful in a solicitor telling his client that he does not think he has a good cause of action. So far there is nothing in the nature of a crime or unlawful proceeding. The unlawful proceeding does not begin until after the advice has been, given. There is therefore nothing to take the communica- tion inquired into out of the general rule of privilege. For these reasons, which are not quite the same as those given by the

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O'Connor J. I cannot adopt all the reasoning of the learned Judges in the Court below, but I have no doubt that their conclusion was right. The law applicable in a case of this kind is concisely stated by Lord Halsbury LC. inthe Bullivant Case (1), in a passage that has been read by the learned Chief Justice. The Lord Chancellor, after stating the general principle that communications which take place between solicitor and client in the course of professional employment are privileged from disclosure in a Court of Justice, goes on to explain the ground of the privilege, and the exception which arises when the com- munications have relation to crime or civil fraud. I shall not requote the passage, but I wish to refer to the last line of it, in which he says that the privilege cannot be lost except in a case in which there is "some definite charge of something which dis- places the privilege." The class of cases in which the privilege will be displaced are set out in the judgment of Mr. Justice Stephen in R. v. Cow and Railton (2). The result of these authorities I take to be this, that the privilege will not be lost unless in the course of the proceeding in which the evidence is tendered it is definitely charged that the communication was in itself a step in the commission of a crime or preparatory to or in aid of the commission of a crime. 'The same rule applies where the communication is a step in, or preparatory to, or in aid of what has been called " civil fraud," that is the carrying out of a fraud not amounting to a crime, but in respect of which the Civil Courts will give relief. A communication made under any of those circumstances loses the privilege, and it is immaterial whether the solicitor was or was not aware of the criminal or fraudulent purpose of the communication at the time when the communications were going on. Such being the state of the law, I turn now to the allegations in these proceedings upon which Mr. Wise has relied as bringing the communication referred to within the exception. It is charged against the defendants that they were guilty of a civil fraud in the sense I have explained in

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sion of the learned Chief Justice of Victoria for the moment that this was an unknown cause of action. But the learned pleader probably had in view Grainger v. Hill (1), where Tindal OJ. refers to actions for abusing the process of the law by the issue of a capias as applicable where the process is resorted to in order to extort property from the defendant, and the learned Chief Justice draws a distinction between such an action and one for malicious arrest. That view was supported by Vaughan J.,so that it cannot be said that such an action is altogether unknown. I say nothing more as to that. In taking the two issues together, it is an action practically for having the now plaintiff arrested in order to extort from him money which the now defendants knew was not owing to them, practically a fraud, as that class of conduct is termed in the case of the Duke de Cadaval v. Collins (2). In that state of things the interrogatories are put, and the question that is asked practically in each one of them is as to the advice which the defendants in this action got from their legal advisers in Melbourne or Sydney regarding the liability of the plaintiff in respect of the cause of action that was originally sued upon. It was as to the liability of the plaintiff, not as to the defendants' right to issue a ca. re. That, as the learned Chief Justice has put it, is not a part of the matter that forms the gist of the present action. It was an antecedent matter - something which was done, it is assumed, in order to ascertain the true legal position of the now plaintiff and defend- ants. It is urged by Mr. Wise that inasmuch as a fraud on the part of the present defendants is alleged, and an abuse of the process of the Court is alleged, an illegal act in connection with procedure, therefore he is entitled to obtain from the opposite party information as to the advice they received from their solicitor relating solely to their original right of action. The line that separates the admissibility from the non-admissibility of this class of question has been already stated, and I agree with my learned brothers. But I will add a few words in order to show why I assent to it. The words of Lord Halsbury L.C., which have been quoted by the learned Chief Justice, include this state- ment (8): - '* For the perfect administration of justice, and for the

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protection of the confidence which exists between a solicitor and his client, it has been established as a principle of public policy that those confidential communications shall not be subject to production." The words "for the perfect administration of jus- tice" are all important, because, as was pointed out by Turner V.C. in Russell vy. Juckson (1), the privilege which protects any confidential disclosure between solicitor and client is not intended simply to protect that confidence, but it rests upon the necessity of carrying it out. Otherwise justice could not be administered, as the Courts would not have the proper opportunity and means of administering the law between the litigants. That being the foundation of the rule, says the learned Vice-Chancellor, the Court must, of course, have regard to the foundation on which it rests, and not extend it to cases which do not fall within the mischief which it is designed to protect. Certainly the rule adopted for the protection of the administration of justice cannot be applied to things which would prevent the disclosure of crime or fraud. "Can it then be said that the communication should be protected, because it may lead to the disclosure of an illegal purpose?" asked the Vice-Chancellor (2), who answered the question in this way : - "I think that it cannot; and that evidence which would otherwise be admissible, cannot be rejected upon such a ground. On the contrary, I am very much disposed to think that the existence of the illegal purpose would prevent any privilege attaching to the communication. Where a solicitor is party to a fraud, no privilege attaches to the communications with him upon the subject, because the contriving of a fraud is no part of his duty as solicitor ; and I think it can as little be said that it is part of the duty of a solicitor to advise his client as to the means of evading the law." When the House of Lords came to deal with the Bullivant Case (3) they required a definite and distinct allegation that the matters sought to be discovered were matters that were used as a means to evade the law within the meaning of the law. The word " evade" was used in the pleading, but in a totally different sense, and it was because they differed from the Court of Appeal in that respect that they differed in the final result. How has that been carried out? It must be something,

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