Christopher Murray & Anor v RentWorks Limited & Ors No 2

Submissions - General - Reply - Respondents 22 Throughout the applicants' submissions, a couple of themes became patent and one was that such and such an issue is not an issue raised by the applicant and is merely a respondents' issue, and, therefore, when the respondent cross-examines on that issue there is no waiver of privilege, at least under the rubric of issue waiver, because the subject matter of the evidence elicited goes in no way to any part of the applicants' case. 23 That is a misunderstanding of the way in which the respondents advance their contentions on this argument. In none of the issues raised can it be said that these are, as it were, issues raised by the respondent for the first time on the see-saw between applicant and respondent, and are in no way part of the applicants' case. 24 Another proposition that came through is that there is some overlap or interaction between disclosure waiver on the one hand and issue waiver on the other. The applicants' counsel seemed to cross back and forth in relation to what he was putting, across those two concepts in the context of the various contentions advanced by the respondents. 25 Now, whilst they are all species of waiver and therefore come under a general approach to the question of waiver, they are quite different, and a proper understanding of them makes that clear. They do, nonetheless, carry with them similar concepts of fairness that underpin why it is that the tribunal or the court requires the party found to have waived something to produce that material which goes to that waiver. 26 Of course it is accepted for the purpose of this argument that this material was once privileged. The courts and the law view the question of privilege these days carefully and against the background of the deployment of material in particular cases. 27 The courts are not afraid, these days, to say, for instance, that the applicant, if he wants to protect his privilege, has got to be careful in what he alleges and in the way he alleges it and he has got to be careful in the way he answers questions. 28 This case is a good illustration in relation to that last point, because the Commission may recall the references in relation to the question of Mr Murray's insistence of loading up answers with material not called for. This is not a case involving a naive or unsophisticated witness, unaware of his rights. Plainly, Mr Murray understood perfectly well that if he transgressed or, as he put it, "fell off the precipice" into areas where he was revealing the substance of his advice, then he would get himself into disclosure waiver problems, and he was warned about that and he understood it. He was well aware of the dangers in praying in aid advice he received. 29 A couple of times it was suggested that there was a fast cross-examination which had, in effect, snuck out an answer from a witness who was under pressure, in circumstances where there had not been an opportunity for counsel to object, or counsel had missed the question. Mr Murray is well protected here. There were many objections taken throughout his cross-examination. That sort of submission carries no weight whatsoever because the questions to which allusion has been made are simply unobjected to. Submissions - General - Applicant 30 The law of legal professional privilege protects basic rights - Ampolex v Perpetual Trustee Co (Canberra) Ltd (1996) 137 ALR 28 at 33 per Kirby J. The possibility that a court might be restricted in its capacity to determine the truth is a price for the advantage of legal professional privilege - Pickering v Edmunds (1994) 63 SASR 357 at 362 and Telstra Corporation Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152 at 167F - cf Gough & Gilmour Holdings Pty Ltd v Caterpillar of Australia Pty Ltd (No 1) (2001) 106 IR 239 at [48]. 31 Waiver is a rule based on fairness. Ordinary notions of fairness require that an assertion of the effect of privileged material or partial disclosure of its contents is regarded as a waiver - Attorney General for NT v Maurice (1986) 161 CLR 475 at 493. A reference to privileged material is insufficient to establish a waiver - Maurice at 481.5. 32 The conduct of a party can lead to an implication of consent to use privileged material: for example, a "state of mind" case. A consequence of this is not to waive material in relation to legal advice that may have played a part in the formation of the relevant state of mind. Rather, without defining exhaustively the scope of the principle, where an element in a cause of action is a party's state of mind, then the party is taken to have waived privilege in respect of legal advice material to the formation of that state of mind - Telstra at 167F-168B. 33 What is found in the respondents' submission is the suggestion that, assuming there to be some waiver, that documents generally should be produced, and that is illustrated, for example, in the reference to the bundle of materials and to the suggestion that all documentation of a privileged kind should be produced and there might be some others. It is necessary to define it precisely because it is a matter of fairness that in the first instance a client is entitled to legal professional privilege. 34 In the event that the Commission considers that there has been a waiver in respect of any matter, then it is submitted it is necessary to identify the factors that give rise to the waiver and to particularise the extent of the subject of the waiver. 35 It is necessary to judge the fairness of any waiver. It is necessary to look to the conduct which excites the waiver in order to determine whether waiver has in fact occurred. It not sufficient for the respondent to identify an interest in the material or to suggest that he has good reasons why it would wish to view the material, as the respondents seem to do. Legal Principles 36 I set out again the principles as to legal professional privilege and waiver considered in the first judgment of 8 June 2001 and expanded to take account of submissions in this instant application. 37 In Mann v Carnell (Mann) ( (1999) 201 CLR 1 at 13) (74 ALJR 378 at 384) it was said that: 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. 38 It was said by Mason and Brennan JJ in Attorney-General for the Northern Territory v Maurice (Maurice) [(1986) 161 CLR 475 at 487 and 488] that: Legal professional privilege is an ancient doctrine which has assumed a life of its own. Succinctly stated, the privilege protects from disclosure "communications made confidentially between a client and his legal adviser for the purpose of obtaining or giving legal advice or assistance": Reg. v Bell: Ex parte Lees (49), per Gibbs J. The raison d'etre of legal professional privilege is the furtherance of the administration of justice through the fostering of trust and candour in the relationship between lawyer and client. … When the privilege applies, it enables the client to keep the communication from disclosure and interferes with the public's "right to every man's evidence": Cobbett's Parliamentary History (1812), vol 12, p 675. Because of this conflict between the public interest in ensuring the availability of all relevant evidence in a particular case and the public interest in the administration of justice through effective legal representation, the privilege is confined within strict limits: Grant v Downs (51), per Stephen, Mason and Murphy JJ. The limiting effect of legal professional privilege on the availability of evidence otherwise relevant is confined, inter alia, by the doctrine of waiver. A litigant can of course waive 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 reason of 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: see Great Atlantic Insurance Co v Home Insurance Co (52). Hence, the implied waiver inquiry is at bottom focused on the fairness of imputing such a waiver. In that same case (at 492 ff) Deane J stated: Waiver of legal professional privilege by imputation or implication of law is based on notions of fairness. It occurs in circumstances where a person has used privileged material in such a way that it would be unfair for him to assert that legal professional privilege rendered him immune from procedures pursuant to which he would otherwise be compellable to produce or allow access to the material which he has elected to use to his own advantage. Thus, ordinary notions of fairness require that an assertion of the effect of privileged material or disclosure of part of its contents in the course of proceedings before a court or quasi-judicial tribunal be treated as a waiver of any right to resist scrutiny of the propriety of the use he has made of the material by reliance upon legal professional privilege. There are, however, no considerations of fairness which require that compliance by a party with a procedural requirement that he prepare and make available a document setting forth the case which he proposes to make before a court or quasi-judicial tribunal should be treated as a waiver of his right to claim legal professional privilege in respect of all the material upon which he has relied in the preparation of that document. If, in such a document, a party sets forth part of the contents of a particular identified document or communication or asserts the effect of or his reliance upon a particular identified document or communication, it may be that considerations of fairness might require that he be treated has having waived any legal professional privilege in relation to the whole document or communication: cf Butt es Gas and Oil Co v Hammer [No 3] (68). Where, however, he does no more than make use of privileged material (eg legal advice, expert opinion or statements of potential witnesses) for the purpose of formulating the statement in such a document of the details of the case which he proposes to make, it would be an affront to ordinary notions of fairness to hold that the effect of his compliance with that procedural requirement was that he has waived his legal professional privilege in relation to such material. 39 The essence of the issue as to waiver of legal professional privilege was considered by the New South Wales Court of Appeal (Gleeson CJ, Clarke JA and Sheller J) in Benecke v National Australia Bank [(1993) 35 NSWLR 110 at 116] as set out in the judgment of Clarke JA (and agreed to by Gleeson CJ and ShellerJ) was that: In her amended summons the appellant claimed that her case had been settled without her consent and added a contention that the lawyers on both sides were apparently acting in concert. In her affidavit in support, sworn on 23 October 1992, she unequivocally asserted that Ms Beazley had compromised the proceedings contrary to her express instructions that the matter proceed to trial. … The appellant, in making her assertions that her lawyers compromised the proceedings without her consent, opened up the question of the authority of the lawyers to act as they did and thereby waived her privilege. I take this to be clear as a matter of legal principle on grounds of basic fairness. 40 In Pickering v Edmunds [(1994) 63 SASR 357 at 362], Duggan J set out briefly the main features of a number of authorities either relevant to or referred to in these proceedings and went on to say: Accordingly a waiver of legal professional privilege will be readily inferred where a client brings proceedings for professional negligence against his or her solicitor: see eg Lillicrap v Nalder & Son [1993] 1 WLR 94; [1993] 1 All ER 724. … Another example is to be found in Thomason v Municipality of Campbelltown (1939) 39 SR (NSW) 347; 56 WN 108 where the widow of a workman who was killed in the course of his employment brought an action at common law to recover damages for the loss sustained by reason of her husband's death. It was claimed by the defendant that the plaintiff, knowing she had an option, had previously decided to proceed against the defendant under the Workers' Compensation Act 1926 (NSW). It was established that she had received legal advice to the effect that she had an option to sue at common law or under the Act. One of the reasons why the Court of Appeal decided that there had been a waiver of privilege in respect of all legal advice which the plaintiff had been given (two solicitors advised her at different times) was because the nature of the action which she had brought made the advice relevant. … Mr Clayton also placed reliance on Hongkong Bank of Australia Ltd v Murphy [1993] 2 VR 419. In that case the plaintiff asserted in its statement of claim that it was induced to enter into an assignment agreement by reason of representations and warranties made by one of the defendants. The plaintiff claimed legal professional privilege in respect of letters and memoranda containing instructions to or advice from its solicitors in relation to the matter. The defendants argued that where a party, by its pleading, directly or indirectly puts in issue the content and substance of legal advice it received about a particular matter, it cannot raise legal professional privilege to prevent proof of that advice. It was claimed that the advice was critical to the issues of reliance, bona fides and knowledge and that all matters relating to the transaction including legal advice given to the plaintiff prior to the execution of the agreement should be disclosed. Smith J held that privilege had been waived. He said that if the documents were not disclosed there would be a real possibility that the fact-finding task of the court would be seriously comprised and a further possibility of it being misled. His Honour follows Thomason's case and Torcasio Developments Pty Ltd v County Park Developments Pty Ltd (unreported, Supreme Court, Vic, Byrne J, 9 September 1991). His Honour then turned to the facts of the case before him: The setting aside of the 1982 deed is one of the major forms of relief sought by the respondents. The statement of claim alleges that the execution of the deed was procured by duress and that the respondents were acting under the mistaken belief that the deed of trust dated 21 October 1980 was void for illegality or otherwise unenforceable in their favour. This information, it is said, came from the first appellant. In the defence of the first and second appellants it is claimed that the 1982 deed was "entered into after the plaintiffs had received independent legal advice from Messrs Stratford and Co … Paragraph 6 of the reply states: "… the plaintiffs admit receiving advice from Messrs Stratford and Co but say that in the light of the matters pleaded in the statement of claim such advice does not defeat the claim of the plaintiffs herein." The effect of these pleadings and, in particular the statement of claim, is that the respondents have put in issue their state of mind and knowledge as to the legal effect of the 1980 deed of trust as at the time of executing the 1982 deed. According to their pleadings this view of the legal position resulted in their executing the 1982 deed. They agree, however, that they received legal advice from Messrs Stratford and Co before entering into the deed. A waiver of legal professional privilege cannot be implied simply because the pleadings made such advice relevant. The possibility that the court might be restricted in its capacity to determine the truth is part of the price which must be paid for the advantages of legal professional privilege. It is only when the conduct of the party entitled to the privilege and considerations of fairness outweigh the competing considerations concerned with the exercise of the privilege that a waiver will be implied. In the present case the conduct of the respondents is such as to make the issue of their appreciation of the legality or otherwise of the trust deed of crucial importance in the case. An effective trial on that issue could not take place in the absence of evidence as to what legal advice they received on the matter. Furthermore the appellants would be unfairly deprived of the opportunity to put material before the court on this key issue. It is true that the respondents did not raise directly the legal advice they received. However they did put in issue their understanding of the legal effect of the earlier deed based on information they had received. 41 In Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd [(1995) 37 NSWLR 405 at 411 ff], Giles CJ CommD, considered waiver of privilege where legal advice was at issue in relation to allegations concerning state of mind: Ampolex submitted that the documents in the hands of GPG Nominees, Allied and Sir Ronald Brierley, if ever attracting privilege, had lost their privilege when GPG Nominees and Allied alleged that they had purchased the notes in the belief induced by Ampolex that the notes were convertible on the basis set out in the trust deed and endorsed on the notes; alternatively, the allegation by Ampolex that GPG Nominees and Allied had particular beliefs as to its (Ampolex's) state of mind had the same result. According to the submission, GPG Nominees and Allied had opened up for investigation and testing the source of and basis for their belief, and inspection could not be denied of documents relevant thereto, or alternatively the allegation by Ampolex did the same. … Confining attention to the allegation made by GPG Nominees and Allied (the alternative of the allegation made by Ampolex may raise other considerations, and I prefer to put it aside), 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, as was plain from the dates of and descriptions of the documents: were that not so, the principle may not have applied. … By their pleading GPG Nominees and Allied raised an issue in the proceedings. They thereby became obliged to give discovery of documents relevant to the issue, and documents with apparent relevance to the issue could be subpoenaed. 42 In Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd [(1996) 40 NSWLR 12 at 19], Rolfe J in considering s 122(2) of the Evidence Act 1995, stated that: In my opinion the substance of the advice may well be disclosed if the ultimate conclusion, without the supporting reasoning process, is revealed. … Further the ultimate conclusion, whilst it may be a "result" or "consequence" of the reasoning is more than that: in its own right it is the essence or vital part of the advice. Some advices may be very short and answer the question with a minimum of reasoning or, in some circumstances, without any. 43 In Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd [(1996) 137 ALR 28 at 33, Kirby J stated: The law of legal professional privilege is an important branch of the law protecting the basic rights of persons in a society such as ours. Those rights include the right to approach lawyers without concern that matters disclosed, and advice received, in confidence will ordinarily enjoy the protection of the law. Increasingly, in recent years, this Court and other courts of high authority, have described such rights in the language of basic civic rights. They have also been explained as rights pertinent to the just operation of the adversarial system rather than, as they have sometimes been explained in older or other authorities, as rules of evidence or procedure. Within this Court, there have been divisions of opinion on this point. However, generally speaking, I consider that the trend of recent authority supports the submission that legal professional privilege constitutes an important civic right to be defended, as such, by the law. There is no doubt that legal professional privilege may be extinguished by clear statutory provision. It may also be waived by decision of the client. 44 The headnote to Wardrope v Dunne [(1996) 1 Qd R 224] is in the following terms: The defendants alleged that they and their insurer were induced to compromise the plaintiff's action for damages for personal injuries by his fraudulent misrepresentations and claimed a declaration that the compromise was lawfully repudiated. The plaintiff declined to admit that the compromise was induced by his representations and applied for an order that the defendants discover and produce for inspection the written advice and recommendations relating to settlement of the action furnished to the insurer by its solicitors. Held, granting the application, that when the contents of a privileged communication became the subject of a legitimate and reasonable issue in litigation, such as the state of mind of a party who had received that communication, then the privilege was lost. Accordingly the documents in question were no longer privileged and the order sought would therefore be made. Thomason v the Council of the Municipality of Campbelltown (1939) 39 SR (NSW) 347, 358-359; Hongkong Bank of Australia Ltd v Murphy [1993] 2 VR 419, 436, 439; Data Access Corporation v Powerflex Services Pty Ltd [1994] AIPC 91-112 at 38,715 followed. Attorney-General (NT) v Maurice (1986) 161 CLR 475, 481-482 considered. Further details are found in the course of the judgment of Derrington J (at 225 and 226): Of necessity, the application [for discovery] has been modified to refer only to the documents relied on by Mr Johnston of Suncorp, the officer handling this claim and authorising the compromise. He has deposed to having received and considered the plaintiff's documents containing the alleged misrepresentations, and his affidavit continued: "3. I received certain recommendations from Mr Maurice Miller the solicitor acting for the Corporation in relation to the settlement of the action. … … It is to the recommendations received from Mr Miller and upon which Mr Johnston said that he was induced to authorise the settlement that the application is now confined. … The principal instruction derived from the authorities on waiver of privilege is that fairness is the determinant in those cases, and it may be regarded as a factor here if that is open. They may also be of some assistance here by analogy. They show that when the contents of a privileged communication becomes a genuine issue in the action, then the privilege is lost because of the need for full enquiry as to the issue. In that case, it is because the party claiming privilege has opened the issue that the waiver is implied; but waiver is the process by which the loss of privilege has occurred and it is a different matter from the reasoning as to why it should be lost. This is seen from the observations of Gibbs CJ in Attorney-General for the Northern Territory v Maurice (1986) 161 CLR 475 at 481-482, … The same basic principle is relevant to this issue, that is, whether the original privilege has been lost because the state of mind of Mr Johnston, which may or may not have been influenced by the privileged material, is in issue. In the resolution of that issue it is necessary to investigate all relevant matters in his mind at the time in order to determine whether he was so induced by the alleged representations at all. Cognate to this is the question whether other factors constituted the inducement. The recommendations of Mr Miller and the terms of all advice concerning the recommendations which Mr Johnston says provided the material upon which he made his decision is obviously highly relevant to the enquiry. It would be grossly unjust to the plaintiff to deny him access to it in order to investigate and test the claim. 45 In Telstra Corporation Ltd v BT Australasia Pty Ltd [(1998) 85 FCR 152 at 167 ff] Branson and Lehane JJ discussed implied waiver: In Attorney-General (NT) v Maurice Mason and Brennan JJ said (at 487): A litigant can of course waive 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 reason of some conduct on the privilege holder's part, it becomes unfair to maintain the privilege. Within that framework, 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] 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. Before returning to the construction of s 122(1) of the Act, some comments should be made, obvious as some of them may be, about the scope and effect of the principle just stated. It does not constitute a broad inroad into legal professional privilege as a "substantive and fundamental common law principle" ( Carter v Northmore Hale Davy & Leake (1995) 183 CLR 121 at 122 per Deane J). Nor does it involve any balancing of competing public interests, one in facilitating the application of the rule of law by promoting frank communication between clients and their legal advisers, the other in ensuring that all relevant evidence is placed before a court adjudicating as to the legal rights of parties before it: the recognition of the privilege is itself the outcome of such a balancing process: Waterford v Commonwealth (1987) 163 CLR 54 at 64-65; Carter at 128. Nor is it a consequence of the principle that whenever a person's state of mind is relevant to an issue in proceedings, privilege is taken to be waived in relation to legal advice that may have played part in the formation of that state of mind (so that the principle does not, for example, deny the authority of Kennedy v Lyell (1883) 23 CH D 387; Lyell v Kennedy (No 2) (1883) 9 App Cas 81). 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. 46 Earlier they had said (at 166-167): A party who initiates an undue influence case puts in issue the proceeding the quality of his or her consent or assent ( Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 per Deane J at 474). The quality of such consent or assent will ordinarily be affected by relevant legal advice received by the party. The principle that requires that in such circumstances the party not be entitled to maintain the confidentiality of such advice is one of fairness which goes to the integrity of the legal process. To allow a party to put in issue the quality of his or her consent or assent whilst, at the same time, withholding evidence relevant to that issue, would be to allow him or her unfairly to handicap the opposing party to the proceeding, and to compromise the ability of the court realistically to determine the issue. There is, in our view, little, if any, difference in principle between the undue influence cases, the partial disclosure cases such as Benecke v National Australia Bank , and the "other use" cases such as Attorney-General (NT) v Maurice and Goldberg v Ng . In the three classes of cases the law implies a consent to the use of the privileged material, or, what is in reality the same thing, a waiver of the privilege, if by reason of some conduct of the party otherwise entitled to the privilege, it would be unfair to the party, in a way which goes to the integrity of the legal process, for the privilege to be maintained. The legal professional privilege cases are, in our view, to be analysed in the same way. … 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. 47 Their Honours later turned to make some comments about the scope and effect of the principle they had stated after consideration of a number of decisions including Maurice, Thomason, Pickering, Ampolex, Benecke and United States Surgical Corp v Hospital Products International Pty Ltd, those comments included the following (at 167): Nor is it a consequence of the principle that whenever a person's state of mind is relevant to an issue in proceedings, privilege is taken to be waived in relation to legal advice that may have played part in the formation of that state of mind (so that the principle does not, for example, deny the authority of Kennedy v Lyell (1883) 23 Ch D 387; Lyell v Kennedy (No 2) (1883) 9 App Cas 81). 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. 48 In Perpetual Trustees (WA) Ltd v Equuscorp Pty Ltd (Perpetual Trustees) [1999] FCA 925, the Full Court (Ryan, Carr and Marshall JJ) dealt with an application for leave to appeal from orders made at first instance in the Federal Court of Australia, which orders upheld a claim of professional privilege in respect of various documents produced on subpoena by a firm of solicitors which formerly acted for the applicant (Equuscorp) in the principal proceedings. It was stated (at [12]) that Equuscorp had pleaded reliance on representations set out by it in par 16 of its statement of claim: 12 The 24 documents whose production Equus resists are listed in the schedule to an affidavit sworn by Mr Mark Leaker on 17 March 1999. Many of those documents are described as being undated. However, those that are dated fall squarely within the period referred to in para 16 of the statement of claim. … Mr Leaker confirms that 19 of the 24 documents in issue were created "within the context" of the professional relationship existing in May and June 1990 in which Equuscorp engaged the solicitors in relation to the provision by Equus of security for the production of the film. It can be seen that this is not a situation in which there has been a mere pleading of reliance. There is the added ingredient of evidence that legal advice was sought and obtained at a relevantly material time. … 17 In our view, the facts of the present matter reflect the requisite degree of unfairness. Equus complains that it relied on the specified representations when it executed the security document. It says that the words "letter of credit" appearing in that document do not faithfully record the common intention of the parties and that the words were used under a mutual mistake of fact. There is evidence, that at the relevant time or times, ie shortly before executing the security document, Equus sought and obtained legal advice. In our opinion, in those circumstances, it would be relevantly unfair for Equus to be allowed to maintain legal professional privilege. Equus' state of mind is central, at the very least, to its claim for rectification - see Ampolex - a case cited with apparent approval by Beaumont J in his dissenting reasons in Telstra . It had been earlier said at [11]: The substantial injustice which we would identify as resulting if leave to appeal were refused lies in the difficult situation in which Perpetual would be placed in preparing for trial without access to the legal advice obtained by Equus before and at the time when it executed the security document - a matter referred to by Smith J as "trial by ambush" in HongKong Bank of Australia Ltd v Murphy [1993] 2 VR 419 at 438. Consideration of Specific Principles 49 It was said by Boland J in Gough & Gilmour (No 1) (at 255) that: The question in the present proceedings, therefore, is whether it would be fair to the respondent and conducive of ascertaining the truth, to allow the applicants to maintain privilege over any legal advice that may have contributed to their state of mind … (par 48) … I have come to the conclusion and make a finding that, as a matter of principle, the applicants, or any one of them, should not be entitled to maintain privilege over any relevant confidential communication within the meaning of s 118 or s 119 of the Evidence Act 1955 (NSW) which may have contributed to their state of mind in contending or alleging that an: [as set out] (par 50) 50 There was debate between the parties in relation to those statements. Submissions - Applicants 51 In relation to Gough & Gilmour (No. 1), paragraphs 48 and 50 were identified by the respondents and it was indicated that these state the appropriate test. It was the applicants' submission that these two paragraphs do not quite state the appropriate test. At paragraph 48 his Honour said: The question in the present proceedings, therefore, is whether it would be fair to the respondent and conducive of ascertaining the truth to allow the applicants to maintain privilege over any legal advice. 52 Whilst that might be a convenient way of expressing it, if one looks at it more closely, it is not accurate. It is not really a question of whether it is conducive to ascertaining the truth. It is a question of whether it is fair. Fairness is the test in Maurice. Whilst it is within that notion of fairness that one might look to ascertainment of the truth, legal professional privilege, as has been pointed out in many of the cases, is a privilege enjoyed by a client and as a matter of theory that privilege exists notwithstanding that in a particular instance truth is not the necessary victor. 53 When looking at the test the Commission will simply ask whether there is relevant conduct and whether, in the circumstances of that conduct, it is fair. The Commission will not go on to ask a separate in-depth question as to whether it is a question of truth. Now that, of course, is simply defining the correct test that needs to be considered. 54 Mr Fernon went on to submit that, while what he said as to para 48 might be said to be somewhat pedantic, the next point in para 50 is of more significance where it is said by his Honour: I have come to the conclusion and make a finding that as a matter of principle the applicants and any of them should not be entitled to maintain privilege over any relevant communication within the meaning of the Act which may have contributed to their state of mind. 55 It is the notion that his Honour suggests that material may have contributed to their state of mind with which the applicants take issue and was the notion particularly adopted by the respondents. The applicants submit it is a more confined test than that. 56 This particular issue of legal advice "material" to the formation of a party's state of mind was identified by Branson and Lehane JJ in Telstra (at 168). Where the idea of relevant material is referred to in the judgment of Boland J that wider test was specifically rejected in Telstra. 57 The true characterisation is more confined than that expressed by Boland J and adopted by the respondents. It is, rather, material which is "material to the formation of that state of mind". In the event that the Commission would find that there was some waiver, it would be necessary to identify what was the material in the sense described by Branson and Lehane JJ in Telstra. It is not as widely stated or as contended for by the respondents. 58 In this case in relation to the particulars of the various heads that are contended for by the respondents as being waivers, it can be seen that by and large the issues that are raised as being issues that give rise to waiver are not issues of the kind that are discussed in the cases on issue waiver at all. They are not issues that are, as it were, raised by the litigant. They are not issues raised by Mr Murray. By and large they are issues raised by the respondent by way of cross-examination. They are not issues raised on the pleadings as is seen in other cases to which reference is made in which issue waiver is discussed. That is a very significant difference. 59 In Mann v Carnell the court is looking to inconsistency between positions, qualified by considerations of fairness, but that inconsistency is inconsistency arising by the conduct of the client. But that's not this case. This case is fundamentally concerned with the conduct of the respondent. 60 In the recent judgment of Bergin J, in Garratt's, this submission is illustrated. In paragraph 44 of that judgment, it is explained that the plaintiff claims that in filing the defences and cross-claims the defendant has put in issue his state of mind at the time the agreement was entered into as an essential ingredient of his defences and cross-claim. At para 55 where her Honour observes: The range of matters that did contribute to the defendant's entry... had been made central to the issues in the case by the defendant's pleadings. 61 Going to the particulars of this case shows that it is not that type of case at all. 62 The applicants' submission that one must look to the party who raises a particular issue in considering issue waiver, is indeed illustrated in the respondents' submission where they refer to paradigm cases. Not one of them is this case. Submissions - Respondents 63 In relation to the applicants' submission as to Gough & Gilmour (No 1) and the statement by Boland J that the relevant test concerns documents "which may have contributed to their state of mind", rather than some other perhaps harder level of test, the respondents contended that his Honour was, in fact, balancing the fairness of hiding from one side material which influenced state of mind in a case such as that before him, in circumstances where the case had been put the way that it had. His Honour, in dealing with that, was in effect looking for the truth of the matter in issue in order to give effect to the principle of fairness which underlies this area of the law. And far from wrongly formulating the test, his Honour correctly formulated the test and correctly applied it. 64 A recent decision in the Supreme Court in relation to some other matters in this area is the case of Garratt's Limited v Thanga Thangathurai (Garratt's) [(2002) NSWSC 39], a judgment of Bergin J. 65 Both in Telstra and Garratt's emphasis was placed upon concepts of cause of action and pleadings. In particular, in Garratt's Bergin J placed significant emphasis on the pleadings themselves as the source for identifying the relevant cause of action and the material that would go to support that cause of action. She did that because in that case what was before her was truly an interlocutory application occurring at a time when the trial had not started and there was no evidence before the court. 66 In this case there is a very different situation. The case is part-heard. There is evidence on the issue, both in chief and cross-examination. It is a very different time line. That is the first point. 67 The second point is that the cause of action is not the kind which exercised the mind of the court in Telstra or Garratt's but rather a wide-ranging power to interfere with arrangements on the ground of unfairness which has a long history of jurisprudence behind it but which is not limited in any traditional way. One has to look at the evidence and one has to look at the way in which the applicant comes to the Commission and asserts his or her entitlement to relief. 68 In the context of that, the present case was brought forward at a time when the Commission did not require the defendant to put forward a statement of grounds and the only documents which could colourably be described as a pleading would be the application and the affidavit filed in support of the application, which is Mr Murray's first affidavit. 69 The respondents submit the following: firstly, the idea that in some way pleadings in the traditional sense of the word exist here and in particular in the present case as a matter which should occupy great focus is wrong. One looks at the Summons and then one looks at the evidence and one has a sensible appreciation of the evidence as coming forward in support of the Summons. 70 That was a matter that Boland J well understood and indeed adverted to in Gough & Gilmour No 7 at paragraph 47 on page 30. This is said: The applications seek to make out a substantial case based on the alleged unfair conduct of the respondents, and so, the applicants have pleaded that they were put in the position by the respondent ... to sell regardless of whether they achieved a fair price. 71 Those matters come forward in the evidence here. 72 The matters did not arise for the first time in cross-examination. Annexure HH to the first affidavit, a letter of 17 February, was tendered by the applicant in chief. Clearly it is overly simplistic in the extreme for the applicants to submit that this whole case is about the conduct of the respondents and that the applicants' conduct bears no relevance or relationship to the applicants' likely success. 73 It is very clear when one looks at Gough & Gilmour (No 7) and other cases, particularly Telstra, that issue waiver is not confined to cases where reliance is pleaded or is integral to the cause of action such as is often the case with s 52 of the Trade Practices Act. 74 In the context of unresponsive answers the applicants put that Mr Murray's evidence was consistent with previous answers and consistent throughout his cross-examination on the point, and then at another point in the submissions Mr Fernon seemed to be suggesting that the respondents were, as it were, stuck with the answers given to questions of this kind. That is a confusion of two relevant areas of the law. The first is that on an issue collateral to the proceedings, i.e., going to credit alone, a cross-examiner may well be stuck with an answer given because he cannot go behind it because the court would reject documentary evidence or other positive evidence going to that. 75 That is not what this is about at all. This is about asking questions in relation to issues and being given answers which partially disclose material which goes to the issue. 76 Secondly, it is not a question of consistency in the answers being given but rather a question of whether or not having regard to the answers given the witness or the party should be allowed to maintain the privilege and the issue is whether reliance upon the evidence is consistent with the maintenance of the privilege. That much comes out of Mann v Carnell particularly. 77 What the court is doing at all times in this area is weighing up what has occurred against the maintenance of the privilege by the party asserting it to see whether in fairness that position is consistent and should be allowed to continue. Consideration 78 At par 50 of Gough & Gilmour (No 7) Boland J decided that privilege could not be maintained over any relevant communication within the meaning of the Evidence Act which "may" have contributed to the applicants' state of mind. 79 In coming to that conclusion, Boland J was referring back to the submission put by Mr Shaw QC on behalf of the applicants "that the question should be whether, by putting in issue representations upon which it was alleged the applicants relied upon to their detriment, there was "implied consent" on their part, within the meaning of s 122(4) of the Evidence Act, to waive privilege in respect of legal advice that may have contributed to the applicants' state of mind in relying on the representations. Mr Shaw submitted that was no implied consent to waive privilege." (My emphasis) 80 In Gough & Gilmour (No 1) and Gough & Gilmour (No 7), Boland J has had cause to examine extensively the subject of legal professional privilege and alleged waiver of it. Part of that examination at para 28 in Gough & Gilmour (No 1) is set out below: There appears to be two categories of waiver in the context of legal professional privilege, namely, "disclosure waiver" and "issue waiver". Disclosure waiver is exemplified by Mann v Carnell and Benecke v National Australia Bank (1993) 35 NSWLR 110. Issue waiver is that where a litigant opens up the source and basis for its belief on a particular question, inspection cannot be denied by a general law claim of legal professional privilege: Telstra Corporation Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152 at 155. In that case the respondent sued the State of New South Wales and Telstra, inter alia, for damages for misleading or deceptive conduct, alleging reliance upon the conduct. The State of New South Wales and Telstra sought discovery of documents subject to legal professional privilege that went to the state of mind of the appellant. Putting aside, for the moment, the other issue in the present case relating to the impact of the provisions of s 122 of the Evidence Act 1995 (Cth), it was held by Branson and Lehane JJ, Beaumont J dissenting that where 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 the 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. … 81 The definitions of "material" in the Macquarie Dictionary include the following: 12 of substantial import or much consequence. 14 Law (of evidence, etc) likely to influence the determination of a cause. 82 In Butterworths Australia Legal Dictionary 1997, "material" is defined as "important, essential or relevant". 83 Once issue waiver has occurred where a litigant opens up the source and basis for its belief on a particular question, the other party is entitled, as a matter of fairness, to inspect legal advice, if any, that has been given in relation to that particular question. Whether or not that advice was "material" ie "important, essential or relevant" to the formation of that state of mind or belief as to a particular question, would be something that could be known only to the applicants. However, in all fairness, it has to be made known to the other party, to allow that party to explore the issue further. 84 As to the submissions in relation to par 48 of Gough & Gilmour (No 7) the relationship between truth, fairness and legal professional privilege has been the subject of consideration in many cases. 85 It was said by Mason and Brennan JJ in Maurice (at 488) that "an implied waiver occurs when, by reason of 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. … Hence, the implied waiver inquiry is at bottom focused on the fairness of imputing such a waiver". It was made clear in Mann (at 94) in the judgment of Gleeson CJ, Gaudron, Gummow and Callinan JJ, that what brings about the waiver is "the inconsistency … between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large". That latter exposition sits side by side with what was quoted by Mason and Brennan JJ in Maurice (at 487), "the raison d 'etre of legal professional privilege is the furtherance of the administration of justice through the fostering of trust and candour in the relationship between lawyer and client … . When the privilege applies, it enables the client to keep the communication from disclosure and interferes with the public's "right to every man's evidence": Cobbett's Parliamentary History (1812), vol 12, p 675" … . 86 The position was stated very succinctly by Duggan J in Pickering v Edmunds in the extract set out earlier at par 40: The possibility that the court might be restricted in its capacity to determine the truth is part of the price which must be paid for the advantages of legal professional privilege. 87 In relation to the difference between the parties as to the test said to be stated by Boland J in Gough & Gilmour (No 1) at par 48, I simply state that truth, per se, is not the touchstone against which the question of waiver of professional legal privilege is tested. If that were so, legal privilege would not exist. I do not see that Boland J took a different approach.

Legislation 88 Insofar as is relevant, s 122 of the Evidence Act 1995 provides: 122 Loss of client legal privilege: consent and related matters (1) This Division does not prevent the adducing of evidence given with the consent of the client or party concerned. (2) Subject to subsection (5), this Division does not prevent the adducing of evidence if a client or party has knowingly and voluntarily disclosed to another person the substance of the evidence and the disclosure was not made: (a) in the course of making a confidential communication or preparing a confidential document; or (b) as a result of duress or deception; or (c) under compulsion of law; or … (4) Subject to subsection (5), this Division does not prevent the adducing of evidence if the substance of the evidence has been disclosed with the express or implied consent of the client or party to another person other than: (a) a lawyer acting for the client or party; or … Note: Subsection 5 is not here relevant. Specifics of claimed waiver 89 The respondents submitted that application of the principles applied in the cases referred to by them to the present case demonstrates that the applicants have waived privilege in each of the following instances: (a) Mr Murray has partially disclosed the substance of his earlier communications with Harmers and so has waived privilege over those earlier communications, that they are in effect in a separate category. (b) He volunteered a version of his dealings with Harmers in the period between 9 September 1998 and late January 1999 and so has waived privilege in relation to those dealings. (c) He has put in issue his state of mind during the valuation process, a period during which he was obtaining advice from Harmers which is likely to have contributed to that state of mind and so has waived privilege. The respondents may even have only to satisfy a test which goes to "which may have contributed" and may not be as high as "likely" (see Gough & Gilmour (No 1) at [50]). On either basis, the respondents have satisfied that test. (d) Mr Murray has put in I ssue his state of mind in relation to his reference in his letter of resignation to 30 June 1998 and whether he was thereby intending to propose that that date be used as the date of the valuation of the MacDome shares, at a time when he was being advised by Cutler Hughes & Harris and so has waived privilege in any advice provided by that firm in relation to that aspect of the Shareholders' Agreement and his letter of resignation. (e) Mr Murray has put in issue his state of mind in the period January to March 1999 in relation to his desire to stop the sale and transfer of the shares from proceeding at the valuation figure at a time when he was receiving advice from Harmers which again is likely to have contributed to that state of mind and thereby waived privilege; and (f) Mr Murray has put in issue his understanding of MacDome's potential liability to pay capital gains tax on its sale of the shares in RentWorks, an understanding which has been contributed to at various times by advice from at least Cutler Hughes & Harris, Dibbs Crowther & Osborne and Mallesons Stephen Jaques and possibly also Harmers. Initial Contact with Harmers 90 This is the first of the instances in which the respondents claim the applicants have waived privilege. It is said: (a) Mr Murray has partially disclosed the substance of his earlier communications with Harmers and so has waived privilege over those earlier communications, that they are in effect in a separate category. 91 This is a re-agitation of the matter dealt with in the interlocutory decision of 8 June 2001 and in relation to which the Commission said could be renewed again, if that course of action was thought to be appropriate, by the respondents at a later stage of proceedings. 92 It was said by the respondents that it is an issue in the case whether or not Mr Murray had the benefit of legal advice in relation to his entering into the arrangements under which PriceWaterhouseCoopers were to perform a valuation of RentWorks. If the respondents are not permitted to inspect the correspondence between Mr Murray and Harmers on 9 and 11 September 1998 then they will not be able to verify and test the accuracy of the account which has been given in evidence by Mr Murray. 93 On instructions, Mr Fernon produced the documents dated 9 and 11 September 1998, making a partial claim of privilege in respect of documents set out in the memorandum of 9 September 1998. He also said that the applicants were in a position where they could produce to the Commission the unmasked version of the document which is the 9 September document. If the Commission was of a view that that ought to be disclosed, then the applicants would not say anything further about that, but the applicants did not waive privilege in respect of it, because they did not wish to encourage any further pursuit of documents from the respondents. 94 The unmasked copy of the memorandum was, at the direction of the Commission, produced to the respondents. The two documents became exhibits 50 and 51 in the case. 95 Because the letters of 9 and 11 September 1998 were produced in the course of submissions, Mr Foster said that the respondents are not quite sure how much is left in category one, which is the initial contact between Mr Murray and Harmers. However, they submitted that nonetheless they were entitled to an assurance that that is all there is. Whilst ever they do not have that assurance there seem to be issues still alive. 96 In the light of the production of the documents of 9 and 11 September 1998, I do not deal further with this aspect of the claim. Dealings with Harmers between September 1998 and the end of January 1999 97 This is the second instance in which the respondents claim Mr Murray has waived privilege: (b) He volunteered a version of his dealings with Harmers in the period between 9 September 1998 and late January 1999 and so has waived privilege in relation to those dealings. 98 The "dealings" the respondents were concerned with under this heading were not further particularised and have had to be gleaned from the respondent's submissions. Submissions - Respondents 99 Mr Murray also volunteered information about the substance of his dealings with Harmers during late 1998 and January 1999. This arose against the background of it emerging in the course of Mr Murray's cross-examination that he had retained Harmers in September 1998, at a time when he was aware of the way in which s 106 operated and knew that Mr Harmer "was a practitioner with considerable experience in matters brought under section 106". Moreover, Mr Murray conceded in cross-examination that he made a conscious effort to conceal from the respondents and PriceWaterhouse at all times in 1998 and 1999 that he had been consulting with Harmers between September and December 1998 because he wanted to present a picture that he was acting without the benefit of legal advice during that period. That assertion was actually made in the letter of 17 February 1999 [Ex 19:HH], that is, that he was acting without the benefit of legal advice when he participated in the valuation process. 100 Ultimately in final submissions the respondent will be submitting that there is absolutely no legitimate reason why that could possibly have been said in that letter because it was plainly false and false to the knowledge of the author of the letter and, indeed, of Mr Murray. That letter was tendered as part of this case. Presumably it was thought that the fact that he was taking advice in the early period perhaps would never come to light, but it has. 101 It was also significant that these facts only emerged in cross-examination. Indeed, Mr Murray's evidence-in-chief created the clear impression that he had not been legally advised during the valuation process which commenced in around August 1998 and culminated in the final valuation by PriceWaterhouseCoopers on 22 December 1998. 102 This impression was created in Mr Murray's first affidavit (Ex 19), which: (a) Positively asserted that he did not obtain legal advice prior to signing the PWC engagement letter on 13 September 1998 (para 75); Now in relation to that assertion, it is absolutely true on the evidence so far that he does not appear to have taken advice limited to the terms of the engagement letter. There is nothing that suggests that evidence was not true. But if it is literally true of the way in which it was introduced in chief, the respondents submit, in the absence of any further explanation by the applicant as to the taking of legal advice in relation to other subject matters at the relevant time, it was capable at the very least, and probably did, create an impression that no legal advice was taken in relation to the broader issues at the material time. That, of course, is not the fact. (b) His affidavit was totally silent as to the position thereafter, so that the fact that legal advice was being obtained was not disclosed. (c) Annexed a letter from his solicitors on 17 February 1999 (annexure HH), which he swore had been sent on his instructions (para 111) and which responded to an assertion in a letter from the respondents' solicitors of 8 February 1999 (annexure FF) that "… from August 1998 until PriceWaterhouseCoopers issued a valuation of Macdome's shares in RentWorks … Macdome and Mr Murray consented to and participated in that valuation process" by stating: The participation by Mr Murray and MacDome in the valuation of MacDome's shares by PWC was under duress and without the benefit of legal advice. (Ex 19, annex HH) 103 Against the background of evidence of continued contact with solicitors it was put to Mr Murray in cross-examination that he had been contemplating a s 106 claim throughout the valuation process. Rather than simply deny it, however, Mr Murray, in a series of non-responsive answers, rather than simply answering the questions which were put to him, made positive assertions about the nature and content of his dealings with Harmers during the period from September 1998 to late January 1999 and is asking the Commission to accept those assertions in order to rebut any inference that he was planning all along to make a claim under s 106. At the same time, he is seeking to protect from disclosure the communications with his solicitors which would either verify or give the lie to his version of events. 104 This is a matter that goes to the heart of Mr Murray's credit and the bona fides of the proceedings. It would be manifestly unfair if the respondents were obliged to simply accept these assertions and be denied the opportunity to verify and test the positive account which Mr Murray has volunteered of his dealings with Harmers up to late January 1999. 105 By volunteering that account Mr Murray has implicitly waived privilege in his communications with Harmers between those dates. Submissions - Applicants 106 This issue is identified by the respondents without any particularity. This issue, in so far as it is able to be identified with particularity, does not arise as part of the applicants' case. It is a matter that arises out of the respondents' cross-examination of the applicant. 107 It is said that Mr Murray: "positively asserted that he did not obtain legal advice prior to signing the PWC engagement letter on 13 September 1998." The respondents, perhaps grudgingly but nevertheless, concede that seems to be true, but go on to say "but in relation to other matters" and raise an issue in relation to other matters. It is difficult to see how, but in any event that is not the test. The test that is identified in Maurice (at 488) looks to the subject matter. One needs to identify the subject matter in respect of which there has been partial disclosure so that there is fairness. There is no entitlement to access to legal advice on other matters when it was asserted that one did not obtain legal advice in relation to the PWC engagement letter prior to signing it. 108 Then the submission is put that there is some sort of entitlement arising from a waiver because Mr Murray was totally silent as to the position thereafter, so that the fact that legal advice was being obtained thereafter was not disclosed. It is difficult to see how Mr Murray's silence can have any impact upon the entitlement of the respondents to access legal advice between him and his solicitor. The fact that one is silent about receiving advice does not give rise to a disclosure. 109 Nextly there is reference to the letter of 17 February. Much reliance is made by the respondents on this letter of 17 February, but of course it is not Mr Murray's case which appears in the letter. That is nothing more than in the nature of a letter of demand. Indeed, if one goes to page 905 of the transcript where Mr Murray is cross-examined about this letter and the idea of duress, it says, commencing on page 904 at line 43: What was the duress that you say occurred and to which reference was made ... put in those terms, no. 110 In the light of that cross-examination on the issue raised by the respondents, it is difficult to contemplate how reliance can be made on that suggestion in that letter, not in Mr Murray's letter, of duress and lack of legal advice. 111 It was put to Mr Murray in cross-examination that he had been contemplating a s 106 claim throughout the valuation process. Again, this is not Mr Murray's evidence, not the way he frames his case. This is the way the respondents choose to cross-examine Mr Murray. It is their issue. This is not conduct on the part of Mr Murray that is inconsistent with the maintenance of the applicants' legal professional privilege. 112 There is a fundamental error in the approach adopted by the respondents here to rely on their own conduct to suggest inconsistency, when what they must do is demonstrate inconsistency in Mr Murray's conduct. What is found in respect of those passages of evidence relied upon by the respondents is consistency rather than inconsistency as far as Mr Murray is concerned. 113 All the while it the respondents putting up the issue, the respondents making the challenge. It not Mr Murray who is raising the issue. Issue waiver would only arise where it is Mr Murray's issue. He is simply responding under compulsion in cross-examination to the propositions that are put by the respondents and there is no inconsistency between his conduct and his legal professional privilege. 114 The fact of instructing that proceedings be commenced did not give rise to a waiver. That is what is identified here by the respondents as entitling in part to the waiver (see par 98 of the decision of 8 June 2001). 115 What the applicants submit is the incorrect approach that has been contended for by the respondents is highlighted in the suggestion that it would be manifestly unfair if the respondents were obliged to simply accept these assertions and be denied the opportunity to verify and test the positive account which Mr Murray has volunteered of his dealings with Harmers up to late January 1999. The applicants submit that that is not the case, that the issue was raised by the respondents; that the issue was not raised by Mr Murray; that Mr Murray's position is consistent; and if it is that in cross-examination the respondents choose to open an issue with a witness, then the respondents receive the answers that are given by the witness. 116 The respondents are not entitled to, as it were, go behind a witness's answers given in cross-examination just to test those answers further. If that were the way that legal professional privilege is dealt with, if that were the approach, it would really bring the notion of legal professional privilege to nought because it would be open to a cross-examiner to raise any issue and then pursue documents relating to the advice or the confidential communications relating to that issue between the solicitor and a client. There would be no such thing as legal professional privilege if that were the approach. 117 The fact of having received advice does not waive privilege. The Respondents rely upon the contention that Mr Murray revealed the "nature and content" of his communications with Harmers. This is not so. The evidence referred to in the Respondents' submission (at par 26) does not disclose any confidential communication. There is no disclosure of the "effect" of any communication. 118 It is not "manifestly unfair" (cf Respondents' submission para 29) that the respondents accept the Applicant's evidence. This is an ordinary consequence of legal professional privilege. The Respondents are not entitled to material that is privileged because it wishes to "verify and test" Mr Murray's account. Dealings with Harmers between September 1998 and end of January 1999 119 The transcript references upon which the respondents rely in relation to this aspect of their claim, are set out below: T 814 Q. And you, being a diligent business person, attended to ensuring that you understood the way in which the section operated upon the matter that you were dealing with at that time - that is, the De Bono matter? A. As did the other respondents in the matter as well. [Note: the "De Bono matter" was a s 106 application against the respondent, in which Mr De Bono was represented by Harmers, and in which the applicant was involved on behalf of RentWorks.] T 815 Q. And, in particular, that he [Mr Harmer] was a practitioner with considerable experience in matters brought under section 106? A. As I understood, yes. T 1113 - T1114 Q. You made a conscious effort to conceal from Medway, Kinghorn and PriceWaterhouse at all times in 1998 and 1999 when you were dealing with those people that you had been consulting with Harmers from September 1998 until December 1998, didn't you? A. Yes, that is correct. Q. You wanted to present a picture to each of those people that you were acting without the benefit of advice during this period in 1998, weren't you? A. Put in those terms, yes. Q. And that's the same picture that you sought to present when you put your affidavits on in these proceedings, isn't it? A. By not disclosing in the affidavits that I had advice from Harmers, no, that was not disclosed in the affidavits. Q. But it was deliberately not disclosed, wasn't it? A. Purposefully or not, it was not disclosed, that is correct. Q. You did not state in any of your affidavits that you did not have legal advice in relation to the valuation process, did you? A. No I didn't do that. Q. You were careful not to do that, weren't you? A. By virtue of what happened in drafting the affidavit. Q. No, you were careful not to do that, weren't you? OBJECTION Q. This is your affidavit, isn't it, the first one? A. Yes. Q. And the second, third, fourth and fifth ones are all yours, aren't they? A. Yes. Q. You signed them? A. Yes. Q. And you swore to the truth of them? A. Yes. Q. And you take responsibility for what is in them, don't you? A. Yes. [I note that immediately following the above cross-examination, the transcript records at page 1114: Q. I am putting to you to seek your agreement that you were careful when you swore your affidavits for the purposes of these proceedings not to actually say that you did not have legal advice during the valuation process, weren't you? A. I don't know whether it was a matter of being careful not to. It was done with the assistance of Ms Marks [solicitor, Harmers] and - - SLATTERY: It depends what that means, your Honour. It depends what those words are descriptive of. Everyone knows that the affidavit was drafted with the assistance of some lawyers. My learned friend has got to go further, in my submission, for me to need to intervene. I'm sorry I'm being Delphic, but if I say anything more, I'm going to say something which might be of assistance to the witness that shouldn't be.] T 841 Q. You began your solicitor/client relationship with Michael Harmer & Associates, I suggest, in the full expectation that you would bring a section 106 action in respect of this valuation process, Mr Murray; what do you say about that? A. No, that was not - the time when we decided to bring this action was in late January. Q. You fully intended right from the start, I suggest, to bring this very action; what do you say? A. No. Q. That is why you went to Mr Harmer and didn't stay with Mr Chalmers, isn't it? A. The definitive date to make the decision to pursue these proceedings was in late January. T 842 Q. And everything you did after the end of August 1998 in dealing with PriceWaterhouse and Mr Kinghorn and Mr Lander about the valuation process was done with an eye to the fact that you fully intended in due course to bring this action, wasn't it? A. I was obtaining advice to assist me during the process. T 1225 Q. And do you tell her Honour that from 12 January onwards that was no longer your position? A. During the period between the 12th and the 28th there was a position and a change of mind about the true story of what had been told to PriceWaterhouse about the business, and on 28 January, as you correctly read out, we instructed Harmers that we wanted to commence proceedings. [Note: the "position" referred to in that answer was that described in the immediately preceding transcript: Q. Was this not the position, Mr Murray, that you had decided at all times in 1998, 1999 and the most important thing that you needed to have happen was to secure a commitment from Mr Kinghorn to buy these shares? A. At what time? Q. At all times? A. Up until the meeting - seven days after the meeting of the 5th, no. Q. So up until 12 January 1999 that was your position, wasn't it? A. Yes.] … Consideration 120 In relation to the period September 1998 to end of January 1999, the respondents' concern, insofar as I can identify it under this specific heading, related to their claim that Mr Murray, at the same time as he was seeking advice from Harmers to assist him during the valuation process, had in mind, at the very least, the prospect of, if not the plan to, pursue an application pursuant to s 106. 121 It was contended by the respondent that the first applicant had been contemplating a s 106 claim throughout the valuation process and that his evidence in chief created the clear impression that he had not been legally advised during that process (August 1998 to 22 December 1998). 122 The transcript references at pages 841, 842 and 1225 relied upon by the respondents to support that claim do not, in my view, do so. 123 Those references related to the timing of the applicants' decision to bring this s 106 application. At T841.26 it was put to Mr Murray that he "began" his relationship with Harmers in the expectation he would bring such an action. The time Mr Murray "began" that relationship was September 1998. His answer was that "the time" they decided to bring the action was "late January". The "definitive date" to make that decision was "late January". At T842.29 it was put to him that everything he did after August 1998 in dealing with PWC and others about the "valuation process" was done with an eye to bring this s 106 action. His answer was that he "was obtaining advice to assist me during the [valuation] process". 124 The exchange at T1225.47 related to the "position" of securing a commitment from Mr Kinghorn to buy the shares, the "change of mind" as to the truth of the information given to PWC and the instruction on 28 January 1999 to commence s 106 proceedings. 125 Those answers did not volunteer information as to the substance of the applicant's dealings with Harmers in that period. Instructions were given to Harmers by the applicants but no hint as to whether or not such instructions were affected by advice from Harmers (see Maurice at p 493). 126 Upon my reading of the transcript and references relied upon by the respondents Mr Murray was not, as was asserted by the respondents, making positive assertions about the nature and content of his communications with Harmers between September 1998 and the end of January 1999. He accepted he was receiving advice. He has not waived privilege over that advice. 127 His acceptance that he was aware of the way s 106 operated, that Harmers were experienced in that area of law and that he had sought to keep the respondents and PWC ignorant of the fact he was receiving legal advice, do not, it seems to me, advance the respondents' claims as to waiver of privilege. They are facts, of course, which may be the subject of submissions at a later time. The Applicants' state of mind in relation to their participation in the valuation process 128 This is the third instance alleged by the respondents to involve waiver by Mr Murray: (c) He has put in issue his state of mind during the valuation process, a period during which he was obtaining advice from Harmers which is likely to have contributed to that state of mind and so has waived privilege. The respondents may even have only to satisfy a test which goes to "which may have contributed" and may not be as high as "likely" (see Gough & Gilmour (No 1) at [50]). On either basis, the respondents have satisfied that test. Submissions - Respondents 129 Another important issue in the proceedings as the matter has developed in the course of evidence is Mr Murray's state of mind in relation to his and MacDome's participation in the valuation process between August and December 1998. 130 The issue arises in the following way: (a) Part of the applicant's case is apparently that there was unfairness in the insistence by the respondents on and after 28 July 1998 that the process for the sale of MacDome's shares proceed by way of clause 4 of the Shareholders' Agreement (rather than clause 2.4), and in a valuation being undertaken by PWC. Thus, the particulars of unfairness relied upon include: vi) The first respondent's refusal and/or failure to accept the transfer notice provided by the second applicant under clause 2.4 of the Shareholders' Agreement; vii) The first respondent's insistence that PriceWaterhouseCoopers be utilized to value the second applicant's shares in the first respondent; viii) The first respondent's refusal and/or failure to apply clause 2.4 of the Shareholder's Agreement to the second applicant's shares in the first respondent; ix) The failure by the respondents to require and advise the second applicant to obtain legal advice prior to executing the PriceWaterhouseCoopers letter of engagement. 131 This case that there was something unfair about the way in which the applicants were obliged to participate in the sale and valuation process was taken up in Mr Murray's evidence-in-chief (Ex 19 pars 70 and 75). 132 Mr Murray also annexed a letter from his solicitors on 17 February 1999 (annexure HH), which he swore had been sent on his instructions (para 111) and which responded to an assertion in a letter from the Respondents' solicitors of 8 February 1999 (annexure FF) that "… from August 1998 until PricewaterhouseCoopers issued a valuation of Macdome's shares in RentWorks … Macdome and Mr Murray consented to and participated in that valuation process" by stating: "The participation by Mr Murray and MacDome in the valuation of MacDome's shares by PWC was under duress and without the benefit of legal advice." 133 That letter was tendered by the applicant in the applicants' case and relied upon. That is part of the applicants' case. In Telstra Beaumont J dissented not so much in terms of reasoning but of the timing and Branson and Lehane JJ said: A party who initiates an undue influence case puts in issue in the proceeding the quality of his or her consent or assent. 134 When one comes to weigh up all the evidence the Commission may come to the view that that case for duress has not been made out, but that cannot be decided at the moment. It is tendered by the applicant, it is maintained by the applicant, and thus squarely falls within that principle. 135 Mr Murray asserts that Mr Kinghorn represented something to him about the way in which the agreement would work itself out in the event that there needed to be a sale of the shares at a time prior to the execution of the agreement. 136 Mr Murray does not resile from the case put in that letter. His counsel went very close to suggesting that he did but did not in fact do so, and he can not because his client did not. That is the case that the client is maintaining. 137 This challenge to the quality of Mr Murray's participation in the valuation process was further taken up by Mr Murray in cross-examination in suggesting on several occasions (for instance, at transcript pages 904, 905, 1057 and others) that he participated in the valuation process only because he felt he had no choice in the matter. 138 That is classically the no options, no choice kind of notion that Boland J in Gough & Gilmour said opened up a consideration of advice given at the time which was likely to or may have contributed to the party's belief that he had no choice or no option. That is actually quite a fundamental part of this applicant's case, that he had no choice, no option. It is not an issue the respondents raise. 139 In the course of seeking to explain why he had participated in the valuation process as he did, Mr Murray also sought to take refuge on occasion in his professed ignorance of the legal effect of the Shareholders Agreement. Thus, confronted with the fact that he made no protest to Mr Lander or to PriceWaterhouseCoopers about RentWorks' refusal on 15 December 1998 to provide any further information about post-30 June financial performance, Mr Murray sought to explain this by saying "I wasn't then fully aware of the implied meaning or the implicit meaning of, in a valuation term, 'fully informed' ". 140 In essence an important aspect of the applicants' case is that they now seek to complain about being required to participate in the valuation process with PriceWaterhouseCoopers, notwithstanding that they made no complaint at the time about doing so and notwithstanding that it was at a time when Mr Murray was regularly and frequently consulting Harmers. He conceded that as a fair statement of what he was doing. 141 This is a matter on which the respondents will rely to establish that there was no unfairness in that process having been implemented. The applicants try to meet that issue by various seeking to assert that their participation ought not to be held against them because: (a) they did so under "duress" and "undue influence"; (b) they participated only because they thought that they had "no option" but to do so; and (c) they did not fully understand the valuation provisions of the Shareholders' Agreement. 142 It is clear, however, that at the time it is being alleged that they held this state of mind in relation to their participation in the valuation process under clause 4 of the Shareholders Agreement, they had obtained and were continuing to obtain legal advice on those very matters. In particular (a) Mr Murray had had advice in July 1998 from Mr Chalmers. (b) Mr Murray retained Harmers in around September 1998 in order to "gain legal advice during the valuation process" and consulted them throughout that process. He was in "very regular contact" with them. Indeed, it emerged in cross-examination that Mr Murray had contact with Harmers at every significant point in the valuation process, including settling with them his correspondence with the respondents and PriceWaterhouseCoopers and discussing with them his participation in critical meetings, so that Harmers had input in every important decision made and step taken by the applicants. 143 By seeking to explain their conduct and participating in the valuation process by making various allegations about their state of mind at the time, the applicants have waived their right to protect from disclosure legal advice which may have influenced that alleged state of mind. It is closely analogous to Gough & Gilmour No 1) and Gough & Gilmore (No 7). 144 The applicants therefore waived privilege over any communication between them and either Cutler Hughes and Harris or Harmers up to 22 December 1998, which communications relate either to the process for the sale of MacDome's shares pursuant to clauses 2.4 or 4 of the Shareholders' Agreement or the valuation of those shares by PriceWaterhouseCoopers. Submissions - Reply - Respondent 145 The applicants say that the letter of 17 February 1999 ('HH') is just a letter of demand. The respondents say that letter was brought forward in order to rebut the suggestion that Mr Murray had done what was alleged against him by Baker & McKenzie and had done so willingly. It was tendered in the applicants' case. At no stage have they abandoned a claim based upon that letter and at no stage did Mr Murray disavow the contents of the letter. A couple of times he tried to suggest it was a solicitor's letter and he needed to speak to Ms Marks about what it said, but in his evidence-in-chief he said that letter was sent on his instructions and when he was cross-examined about it he conceded that. 146 It is plain that it is part of his case to allege that his participation in the valuation process was under duress, undue influence and without the benefit of legal advice. It is now known that legal advice was given throughout the period in relation to the valuation process and the respondents are entitled to test just exactly what it was that Mr Murray had in his mind when he made the assertion through his solicitors on 17 February about those matters. They are classically issue waiver matters. 147 Mr Murray implicitly puts forward, if not explicitly, that his approach to the valuation was bona fide and fully expecting that it will be done in a particular way without any concern about the way in which it will be done. He, although it was elicited, ultimately in cross-examination, nonetheless must explain to the Court why it was that he did not mention the five-year plan to Pricewaterhouse. He raises the clause 2.4 case because it is still in the letters and it is still in the pleadings here. 148 The applicants' counsel put some submissions that suggested that really the no option case was all centred around what occurred on 28 July and not otherwise. The no option case is in fact an ongoing thing, as it must be logically, and was shown to be so in Mr Murray's evidence, for instance, at page 1057. The exchange there described, according to Mr Murray, took place in late August. At particular (x) in the amended summons, there is an allegation directed at Mr Medway which relates to the entire period. 149 Ultimately he accepted that it was his view throughout the period he had no choice about Mr Medway's involvement and he had no choice about the way in which the valuation was being done. Whilst the 28th of July may be a significant date, it is not the only date that is important in that process. The Applicants' state of mind in relation to their participation in the valuation process Submissions - Applicant 150 This category is described by the respondents as the applicants' state of mind in relation to the participation in the valuation process. It is described as a matter that developed in the course of evidence, being Mr Murray's state of mind in relation to his and MacDome's participation in the valuation process. The respondents' submission proceeds upon a false basis that the applicants contend for a "state of mind" in relation to their participation in the valuation process. Waiver does not arise on this account. It is important to understand the applicants' case. The applicants' case is not concerned with Mr Murray's state of mind. When one goes through all of the particulars and the way in which they have been characterised by the respondents, the question is not of state of mind of the applicants; this is a question of identifying conduct by the respondents which is said to be unfair by the applicants. The issue is not something analogous to reliance in the s 52 sense. It is quite different. Mr Murray does not raise his state of mind in his case. The unfairness that is alleged arises from the conduct of the respondents. Now true it is that in certain circumstances conduct of that kind might produce uncertainty in the mind of the applicant or, indeed, anyone. But that is not raising state of mind as that idea is understood in the issue waiver sense. 151 Mr Murray in his evidence says at page 868, line 6, that he was not aware of the term "fully informed", in the PWC arrangement. I wasn't fully aware of the implied meaning or the implicit meaning of, in a valuation term, "fully informed". 152 In relation to the point about "fully informed", the respondents stated that Mr Murray sought to take refuge in his "professed ignorance" of the effect of the Shareholders' Agreement. However, the extract of evidence relied upon does no more than explain that Mr Murray was not fully aware of the meaning of the term "fully informed". 153 Insofar as any refuge is sought to be taken, it is limited to the phrase "fully informed". Whilst the respondents' proposition is widely stated about professed ignorance as to the legal effect of the Shareholders Agreement, when one goes to the evidence that is relied upon, it is of a fairly narrow kind, indeed, so narrow that as a matter of fairness it would not warrant any waiver of privilege. When one looks at the way in which authorities such as Maurice are expressed, it is not an inevitable result that privilege will be waived in any set of circumstances. One must look to the fairness of it. Evidence of this kind, that he was not fully aware of the implied meaning or the implicit meaning of the term, does not justify a waiver. 154 It is said by the respondents that it is clear that at the time of it being alleged that the applicants held this state of mind in relation to their participation in the valuation process under clause 4, they had obtained or continued to obtain legal advice on those very matters. None of the references relied upon amounts to a disclosure. None of the references amounts to a basis upon which there would be a basis for waiver of the privilege. 155 When one looks at the material relied upon, in so far as it is possible to assert any waiver at all, the extent of any matter would go to that particular matter ie advice concerning the term "fully informed", because that was the material that he said he was not aware of, that is, at the time of entering into the Shareholders Agreement. 156 The way in which the applicants' case is characterised by the respondents is in fact a little wider than it is in fact. It is said that part of the applicants' case was that there was unfairness in the insistence by the respondents on and after 28 July 1998 that the process for the sale of MacDome's shares proceed by way of clause 4. But when one goes to the particulars, it appears that the applicants' case is concerned with 28 July 1998 and the way in which the respondents suggest that it was concerned, as it were, with events after that date a misstating in the way in which the applicants' case operates. 157 Particulars B3 (vi), (vii) and (viii) of the Amended Summons refer to conduct occurring during the meeting between Mr Kinghorn and Mr Murray on 28 July 1988, not after that date. No lawyers were in attendance. There was no legal advice in that meeting. The evidence relied upon by the respondents is concerned with the meeting of 28 July. The issue in paragraph 32b(iii) is dealt with in issue (a) above. 158 Particular (ix) is: The failure by the respondents to require and advise the second applicant to obtain legal advice prior to executing the PWC letter of engagement. That matter is confined to the execution of the PWC letter of engagement. 159 Mr Murray gave instructions in February 1999 for his solicitors to send a letter. Well, it's a solicitor's letter. That letter "HH" is mischaracterised by the respondents. It is not part of the applicants' case that participation in the valuation was under duress and without legal advice. Rather, the complaint that is made is concerned with Mr Kinghorn's conduct on 28 July. This is made clear in the Amended Summons and is confirmed in the extracts of evidence set out by the respondents. 160 Particular (x) is that it is a failure by the first respondent to ensure that the fourth respondent was not responsible for providing information to PriceWaterhouseCoopers for the purpose of the valuation. That is the issue that is defined by the applicants. That is an issue that is concerned with conduct of the respondents. 161 What is seen when it is all looked at and the context in which this evidence appears is that it is concerned with the conduct of the respondent, not the state of mind of the applicant which is being contended for by the respondents. 162 If the applicants' case in this regard concerning Mr Kinghorn's conduct constitutes a waiver, it could only encompass any material which comprised advice received by Mr Murray prior to 28 July regarding his choices or options in the event that Mr Kinghorn refused to accept the transfer notice. 163 In the respondents' submissions it is said that Mr Murray had obtained advice from Mr Chalmers of Cutler Hughes & Harris in which he had gone through the Shareholders' Agreement and obtained advice which formed the basis of his views about the share sale provisions of that agreement and his understanding as to how they operated. 164 If the respondents' contention is correct, namely, that Mr Murray indicated the advice which formed the basis of his views, that does not amount to a waiver; it does not amount to a disclosure and there is no relevant issue that would give rise to a waiver. All that has been said, at the very highest, is Mr Foster's question at line 50 on page 854: "Q. And the advice that you received led you to that view, did it? A. Yes." 165 But that, of course, does not disclose wholly or partially any confidential communication. At the very highest it indicates a consequence of a consideration, having received advice. That does not amount to a waiver. 166 Such responses do not elicit any evidence of a kind which discloses what the advice is. All that is being elicited here is the consequences of the advice. 167 Indeed, if contrary to that submission it is said that the question at line 51 discloses that advice, then one again has to look at the fairness of the way in which a disclosure might occur. 168 In the circumstances where there is a cross-examination occurring, where a witness is answering questions in a pressured situation under compulsion, one answer of that kind would not justify a waiver of privilege as a matter of fairness because, if that be the case, it would otherwise be plainly an objectionable question. It is said, no doubt, that it was not objected to. The witness in that situation cannot be held to account, as it were, as giving rise to a waiver where an otherwise objectionable question in a flurry of questions and answers is answered in that way. But the more substantial point is that when one looks at the terms of the questions that appear between, say, lines 37 and 55, that there is, in truth, no disclosure of the evidence; there is in truth merely the conduct of the applicant following upon having received advice. There is no disclosure of the content; there is no disclosure of the effect, as Deane J would have it. Moreover, it is not misleading. The conduct is not inconsistent. 169 Reliance is placed upon the cases of Gough & Gilmour, and it is suggested that cases No 1 and No 7 are analogous. This case is not analogous. When one considers Gough & Gilmour (No 7), one sees from that case that one is concerned with a state of mind arising from the pleadings. That is different to this case. Mr Murray does not say in his claim in the pleadings that there was no choice, as it were, that he had no alternative. Rather, the way in which Mr Murray characterises his claim is that he was backed into a corner in the meeting of 28 July. It is not an appropriate way of approaching the question to look at what another case is and what the issues were in that other case. 170 The applicants' case is concerned with the conduct of the respondents, Mr Kinghorn in particular, backing Mr Murray into the corner, as he describes it, on 28 July; and also with Mr Medway's involvement in the process. They are the matters of complaint that are made by the applicant. They are the matters that are concerned with the conduct of the respondent, and that is the way in which they are relevant to the way in which the applicant formulates his claim. It is not, as the respondent characterises it, a general issue concerned with the whole of the valuation process or at least participation in the whole of the valuation process. Transcript 171 The evidence relied upon by the respondents to support this submission included reference to paras 70 and 75 in the first applicant's affidavit dated 6 May 1999 (Ex 19). Reliance was also placed on para 111 and annexure HH of the same exhibit, where the first applicant deposed that on 17 February 1999, his solicitors sent a letter (annexed and marked "HH") to Baker & McKenzie on his instructions. 172 In particular, the respondents relied upon the following assertions in "HH": The participation by Mr Murray and MacDome in the valuation of Macdome's shares by PWC was under duress and without the benefit of legal advice . As such, any purported agreement by our clients to participate in the PWC valuation process is clearly unenforceable on the basis that it arose as a consequence of undue influence and duress on the part of Mr Kinghorn. (Emphasis added) … … the valuation process outlined within clause 4 of the Shareholder's Agreement, considered in conjunction with your client's unfair conduct in: forcing our clients to agree to the PWC valuation … is clearly harsh, unjust and unreasonable … . (Emphasis added) 173 Relevant extracts from the first applicant's affidavit of 6 May 1999 (Ex 19) are set out below: 61. On 25 May 1998, during one of my trips to Australia, I approached Mr Kinghorn at his RAMS office and we had the following conversation: I said: "I am going to resign from RentWorks for a number of reasons. The primary reason is that I do not want any further involvement with Rob Medway. There has been a lack of support over the past several months and I believe he is trying to push me out of the company. I have been blocked out of involvement in the business of RentWorks and undermined to a number of staff." … 70. On 28 July 1998, I met with Mr Kinghorn at RentWorks' offices and handed him my letter of resignation and the transfer notice and said: "As you know it is my intention to resign. I have prepared a transfer notice under clause 2.4." I had the resignation and transfer notice laid out in front of me on the desk and gestured to the transfer notice as I said this. Mr Kinghorn did not look surprised, but said words to the following effect: "No, I don't want to accept that. What we'll do is get Price Waterhouse to value the shares in accordance with the agreement. We'll use the Price Waterhouse valuation. We're better off leaving it up to the experts. Price Waterhouse are a large international firm and we'll provide them with all the information they need and they'll come up with the right results. Once the valuation is done, I will give you an undertaking that we will purchase MacDome's shares." Mr Kinghorn did not look at the transfer notice. I accepted what Mr Kinghorn said, and replied: "Okay, well here's my resignation but I do not want Robert Medway to be involved in providing the information to Price Waterhouse because I don't trust him to provide the correct information." Mr Kinghorn said: "Okay, he will not be involved." I did not want Mr Medway involved in the valuation process as I did not have confidence in his business ethics based on my experience over the eight years in which I had worked with him. There were a number of benefits associated with the clause 2.4 sale process including the fact that MacDome nominated the sale price, the process was potentially expedited and there was no 15% minority shareholder discount. I did not, however, further pursue the transfer process under clause 2.4 at that point as my relationship with Mr Kinghorn at that state was harmonious and I trusted him to act honourably towards me. 75. On about 4 September 1998, I received a letter of engagement from PWC. The letter of engagement did not set out the valuation methodology. Subject to acceptance of the letter of engagement and the timely provision of information, PWC indicated in the letter that they would endeavour to finalise the valuation report by 9 October 1998. I signed the PWC letter of engagement on behalf of MacDome in early September 1998. I did not obtain legal advice prior to signing the letter of engagement. A copy of the letter of engagement is annexed and marked "N". 174 The transcript relevant to both the applicants' and the respondents' arguments on this point is set out below: T 873 FOSTER: Q. It is a falsehood to suggest, is it not, as the first sentence of paragraph 3 of this letter does, that your participation in the process was under duress and without the benefit of legal advice? A. Can I break that into two components, then - under duress and without legal advice? Q. Mr Murray, if you need to do that to answer my question, please do. If, however, you can manage the question without doing that, would you please do the latter? A. I believe the first sentence in paragraph 3 is correct. Q. You were having legal advice throughout the period of the valuation process in relation to that process, weren't you? A. Yes. Q. And no duress had been applied to you which led to your participation in that process, had it? A. The duress was understanding that I had approached Mr Kinghorn about offering to sell the shares under clause 2.4 and that was refused and that he said that the best way is to - as the agreement calls for, was to have Pricewaterhosue value the shares, and that's the way it went. He had control of the whole process from that point. Q. Do you think it is a fair description of your version of the way in which the meeting of 28 July proceeded to describe that as Mr Kinghorn applying duress to you in relation to your participation in the process? A. It was a direction given that I had no choice in , that we're going down this path of the Pricewaterhouse valuation. Note: added emphasis that of the respondents. T 877- 878 Q. And is it your evidence that once Pricewaterhouse were engaged in September 1998, thereafter you had no option but to participate in the valuation process? A. Yes. … Q. And at the time, that is after you agreed to have Pricewaterhouse proceed, you say you formed the view that you had no option but to participate in the valuation process; is that right? A. Yes. Q. When did you form that view? A. Well, the meeting of 28 July when I met with Mr Kinghorn, when the transfer notice was prepared under the terms of the shareholder agreement, and Mr Kinghorn wouldn't accept, wouldn't even look at the transfer notice - wouldn't even accept it. He was of the view - well, what he communicated to me was that - sorry, what he said was that "what we will do is we will get Pricewaterhouse to do the valuation", and that locked into another range of activities within the shareholder agreement. Q. Did he say that or did you understand that, or was it both? A. That's what he said. … T 903 Q. I want to put to you that there was no duress applied to you in relation to the participation by you in the valuation process? A. As we agreed yesterday, what I believe duress to mean is being backed into a corner. I was being backed into a corner . Note: Added emphasis that of the respondents. T904 - 905 Q. What was the duress that you say occurred and to which reference is made in this letter of 17 February 1999? A. Duress in the instance was - it was "there's the letter of offer. We are going to have the shares valued". Without access to Ms Marks to chat to her about it, I can't give you a rational reason, or being put on the spot, to recall the particular thing. Q. Well, that's because there was no duress, was there? A. Well, I was backed into a corner . Note: Added emphasis that of the respondents. … Q. There was no duress in any way, shape or form to your understanding applied to you by Mr Kinghorn, or Mr Medway for that matter, which led to your participation in the valuation process, was there? A. Where else was I going to go? What else was I going to do? I am locked into doing down clause 4. Under the agreement, we are in that tunnel, or that funnel, going down. Q. And that was a consequence of your agreeing to the provisions of the agreement, wasn't it? A. Yes. Q. That's my point, there was no duress applied to you, was there? A. Put in those terms, no. Q. Put in any terms, to your understanding, was there? A. What else was I going to do? Q. I am going to ask you that so you might like to think about it over lunch. A. Okay. … T 1056 - 1057 Q. I will ask you another question if that is not clear. By the time you signed the letter of engagement with Pricewaterhouse on 13 September 1998 did you have any ongoing concern that Mr Medway was to be involved to some extent in the valuation process? A. Yes, it concerned me, but I was in an invidious situation, and I could do nothing about it. Q. Is that what you thought at the time, that you could no nothing about it? A. Yes. Mr Kinghorn had spoken - he told me in no uncertain terms that he would be involved because he couldn't influence an international company, but he did. That is why we are here. Q. He told you, didn't he, when you raised that matter with him that he could not influence the outcome of this valuation in the sense that he could not influence a big international company? A. Yes. Q. As at the time you signed the letter of acceptance [13/9/98] with PriceWaterhouse had you considered what options you had in relation to the sale of the MacDome shares? A. In what way do you mean that? Q. Well, had you given thought to what choices you had as to the way in which those shares might be converted into cash? A. Based on undertakings by Mr Kinghorn that he would purchase them, going outside that, no, I didn't give it any consideration. Q. Is it your case, Mr Murray, that Mr Kinghorn promised to buy these shares at the PriceWaterhouse valuation when you met with him on 28 July 1998? A. Yes, that is my recollection. Q. You know that he disputes that, don't you? A. Yes, I read that in his affidavit. Q. But that is your case, isn't it? A. Not entirely. Q. Well, whether it is "entirely" or not, you assert that a commitment was made at that time by him to purchase the MacDome shares? A. Yes. … T 1063 - 1064 *Q. Is this the position, Mr Murray: were you content for Mr Medway to have contact with PriceWaterhouse in connection with the valuation process they were undertaking, whether it be by telephone or in a meeting, provided that you had an opportunity to put whatever it was you wished to put directly to PriceWaterhouse on your own behalf? *A. Once again I reiterate my earlier answer. I was told that was going to happen. I wasn't content about it. Q. But you did nothing to stop it., did you? A. So what was I going to do? Q. You did nothing to stop it, did you? A. What was I going to do? Q. Please, Mr Murray? A. No, I did nothing about it. I was told that was what was going to happen. Q. Now would you answer my earlier question? A. Would you repeat it, please? (Question and answer marked * read; discussion ensued as to whether the answer was responsive) Q. Is this the position: were you prepared to allow Mr Medway to have contact with PriceWaterhouse either by telephone or in a meeting or indeed in any other way in connection with this valuation process provided that you had an opportunity to deal with them directly yourself and place before them any information or point of view that you wished to on behalf of MacDome Pty Limited? A. Not by choice. Q. And nonetheless were you prepared to do so? A. Yes. Q. That remained the position from 28 July until the shares were transferred in March 1999? A. No. Q. When did it change? A. That I wasn't happy about Mr Medway being involved? Q. No, Mr Murray. When did your preparedness to accept his involvement, in the fashion you agreed you were prepared to accept, change? A. I was told what was going to happen. I had no choice. I had to accept it. Q. You say you had no choice? A. Yes. Q. And then a moment ago I asked you to agree with the proposition that your preparedness to accept that state of affairs subsisted throughout the process up until the shares were transferred and you disagreed, didn't you? A. Yes. Q. Did it change; did your preparedness to accept that situation change? A. Well, in the first instance it was not by choice; I was told. Secondly, the information that was provided to PriceWaterhouse about the future prospects of the business I believe to be misrepresentative. Thirdly, the information that was withheld from them and the difference of point of view that was given to the banks to obtain financing has come out during the discovery in these proceedings. … WITNESS: I had no choice in the matter about accepting his preparedness for him to be involved. When it came to light more was when the valuation came out. T868 Q Why not? A. I wasn't then fully aware of the implied meaning or the implicit meaning of, in a valuation term, "fully informed". … T 805 Q. Did you speak to him again on 13 July? A. I believe I had an in-person meeting with him where I went through the shareholder agreement. Note: "him" referred to Mr Chalmers of Cutler Hughes & Harris. T854 Q. So was this the problem, that having read them and understood them and having signed the agreement you subsequently came to the view that in some way those provisions [of the Shareholders Agreement] worked to your disadvantage? A. Yes. Q. When did you come to that view? A. After obtaining the advice from Cutler Hughes & Harris. Q. The advice that you got from Cutler Hughes & Harris led you to that view, did it? A. That was the view I formed, yes. Q. And the advice that you received led you to that view, did it? A. Yes. … T885-886 Q. You had taken advice about the shareholders agreement prior to the meeting, hadn't you? A. The meeting of the 28th? Yes. Q. And you had taken advice about the best way to proceed going forward given that you were going to resign? A. Yes. Q. And you took advice about how clause 2 would work and about how clause 4 would work, didn't you? A. Yes. … Q. Could you have a look at the letter of 28 July 1998, which is at page 940 in the bundle, volume 5. This was a letter that was drafted with the assistance of Culter Hughes, you've told us that, was it not? A. Yes. … T879 Q. You had a very good understanding by the time you had that meeting [on 28 July 1998] of the workings of clause 2 in the shareholder agreement, didn't you? A. Yes. Q. And you'd had an understanding of that before you'd signed the agreement, hadn't you? A. Not to the extent - I became more familiar with the nuances of it, or the particular terms of it in seeking legal advice. T827 Q. Was the process of arriving at the final version of this letter of 28 July your preparing a draft, discussing it with Mr Charmers [sic] and finalising it in consultation with him either during or after that discussion? A. After I initially met with Mr Charmers [sic], yes. Q. He sent you away, did he, to draft up the first version of this letter after the initial meetings? A. No. As I recall, I went to him with a draft of what I was proposing to say in the letter. Then I went to New Zealand for a week to 10 days, and then on returning I met Mr Kinghorn on 28 July. Q. But was this not the sequence: did you not send Mr Charmers [sic] some material on 13 July 1998? A. I believe so, yes. Q. And speak with him on the telephone on 16 July 1998? A. It was over a period of time that I spoke to him. The specific dates I can't recall specifically. Q. And did he not do some drafting on 21 and 23 July 1998? A. He edited a bit of the letter and added additional parts. Q. And then on 24 July 1998 you and he had a meeting; is that right? A. Without the benefit of either the diaries or the copies of the invoices in front of me, I'm -- Q. Have a look at this folder. I will just show you a document. A. What I'm concerned about is being tricked into saying I did something on a certain date with you with the document in front of you without -- Q. On 24 July you had a meeting with Mr Chalmers, did you not? A. Yes. Q. And that was a meeting at which the draft letter was discussed? A. Yes. Q. As a result of that meeting, there was further work done on the draft by Mr Chalmers, was there not? A. Yes. T839 Q. What I am putting to you is simply this, that certainly by the time you first contacted Michael Harmer & Associates you had formed the view that it was quite likely that you would subsequently bring a section 106 action in respect of the valuation and the valuation process? A. I saw that by the change in the demeanour of Mr Kinghorn that things were - that the landscape had changed, and I sought the meeting from Michael Harmer & Associates to gain legal advice during the valuation process after I had signed the letter of offer - signed the letter of engagement and to advise me. T842 Q. You appreciate that I repeated the question I asked you, don't you, Mr Murray? A. About why I stopped with Hugh Chalmers and went to Michael Harmer & Associates/ Q. Yes. That was the question I was asking you, wasn't it? A. Yes. Q. And I was putting to you, to see whether you would agree with it or not, that you made that change because you had a strong expectation that you would bring a section 106 action about the valuation process? A. In the event that the valuation was not carried out effectively? Q. Without qualification. A. Yes. T 842 Q. And everything you did after the end of August 1998 in dealing with PriceWaterhouse and Mr Kinghorn and Mr Lander about the valuation process was done with an eye to the fact that you fully intended in due course to bring this action, wasn't it? A. I was obtaining advice to assist me during the process. Q. And you constantly and thoroughly did so throughout the process, didn't you? A. Yes, I consulted them on it. Q. You had access to them as freely as you chose to exercise it; correct? A. Yes. T1134 FOSTER: Q. I will move on and come back to it, Mr Murray. You agree of course that you were in very regular contact with lawyers from Harmers in November and December up to the 15th, don't you? A. Yes. T1074 Q. You know that Mallesons weren't approached until January 1999, don't you? A. I believe that is the case, yes. Q. And the same would obtain in respect of Dibbs Crowther & Osborne, wouldn't it? A. Yes. 175 This proposition of the respondents was also supported by extensive reference to the cross-examination of the first applicant found at pages 1069 - 1072, 1076, 1124, 1128 - 1130, 1132 and 1144 of the transcript. Consideration 176 The Amended Summons for Relief filed on 16 November 2001 includes, as to particulars of the conduct in which the respondents engaged alleged to be itself unfair or renders the terms of the Shareholders' Agreement unfair, the following: vi) The first respondent's refusal and/or failure to accept the transfer notice provided by the second applicant under clause 2.4 of the Shareholders' Agreement. vii) The first respondent's insistence that PriceWaterhouseCoopers be utilised to value the second applicant's shares in the first respondent. viii) The first respondent's refusal and/or failure to apply clause 2.4 of the Shareholders' Agreement to the second applicant's shares in the first respondent. ix) The failure by the respondents to require or advise the second applicant to obtain legal advice prior to executing the PriceWaterhouseCoopers letter of engagement. x) The failure by the first respondent to ensure that the fourth respondent was not responsible for providing information to PriceWaterhouseCoopers for the purpose of the valuation. 177 Mr Fernon said that the particulars do not raise the state of mind of the applicants. The 25 particulars identify conduct by the respondents which is said by the applicants to be unfair to them. 178 However, the question then becomes how is that conduct unfair to the applicants? That is something that must be derived from the evidence. How that alleged unfairness was manifested in relation to the applicants was fleshed out in the evidence of Mr Murray. 179 In contrast to Gough & Gilmour (No 7), in this case, although the applicants here also base their case on the respondents' alleged unfair conduct, they did not plead in the Further Amended Summons for Relief that that conduct led to them having no alternative. That assertion was made in the course of evidence given by Mr Murray. 180 The Industrial Relations Commission of New South Wales in Court Session is not a court of strict pleading. Until recent times, in proceedings relating to s 106 (or its predecessors) applications, it was not unusual for the issues between the parties to be only delineated with any clarity or precision in final submissions. That situation was addressed by Rule 18A which commenced 24 December 1999 and which formalised procedures which had been adopted, in one form or another, by individual Judges to overcome at least some of the difficulties they perceived in the running of such cases, either at the state of conciliation or of adjudication. 181 This present case was commenced prior to the introduction of Rule 18A procedures. However, a substantial part of the lay evidence on behalf of the applicants is now before the Court. 182 Mr Murray said he formed the view that he had no option but to participate in the PWC valuation process at the meeting with John Kinghorn on 28 July 1998. it was "duress" in that Mr Kinghorn gave a direction he had no choice in. Asked by Mr Foster as to his appreciation of the meaning of "duress" as at 17 February 1999 (the HH letter) Mr Murray said "That I was - essentially "duress" I see as being backed into a corner with nowhere else to go". Mr Murray said that "Mr Kinghorn refused to accept the transfer notice … we chartered [sic] the course of going down the Pricewaterhouse valuation route". 183 My interpretation of that evidence is that Mr Murray was saying that that conduct of Mr Kinghorn left the applicants no other "choice" than to go down this path of the PWC valuation. 184 Mr Kinghorn had told Mr Murray that Mr Medway would be involved in the valuation process at a meeting some two weeks before Mr Murray signed the PWC engagement letter on 13 September 1998. (That meeting occurred before Mr Murray's first contact with Harmers.) 185 Mr Murray said that at the time he signed that letter, it concerned him that Mr Medway would be involved, but, as an outcome of that meeting, because "Mr Kinghorn had spoken", Mr Murray was in an invidious situation and he could do nothing about it. 186 That evidence leads to the need to examine whether that claimed lack of choice arising, the applicants said, as a consequence of Mr Kinghorn's words and actions, had the result that the applicants had opened up, as an element of their case, based on Particulars (vi), (vii) and (viii), the issue of their state of mind at the time they signed the PWC engagement letter on 13 September 1999 and as to the valuation process. 187 Mr Foster said it was a fundamental part of the applicants' case that they had no option other than to participate in the valuation process. That was the applicants' issue, not that of the respondents, as could be seen from the letter of 17 February 1999 (Ex 19, HH). 188 To an extent, concentrating on the claim of "duress" in the letter of 17 February 1999 may be a diversion. The question is does Mr Murray say that the conduct of Mr Kinghorn on 28 July 1998 was the basis for the view the applicants held as to the course the valuation must take from that date onwards. The answer, to my mind, is plainly yes. 189 Mr Murray does not say that he entered into the valuation process "in reliance on" on the statements made by Mr Kinghorn on 28 July 1998 or later at the meeting in late August/early September. What he says is that those statements "backed him into a corner" and "where else could I go?". That, in my view, is saying that his participation in the valuation process was the outcome of his reliance on what Mr Kinghorn had said, and he has therefore opened up as an element of the applicants' cause of action, his state of mind at the time he entered into and participated in the valuation process. I adopt what was said by Branson and Lehane JJ in Telstra (at 167): 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. 190 I think the connection between the complaints as to Mr Kinghorn's conduct and the subsequent views of the applicants as to their participation in the valuation process cannot be severed. 191 I find that Mr Murray has put in issue his state of mind in relation to the applicants' participation in the valuation process, during which period they were obtaining advice from Harmers which is likely to have contributed to that state of mind and so has waived privilege as to the issue of that participation. 192 Entwined with the applicants' stated views in relation to the valuation process that they were "backed into a corner" on 28 July 1998 and in an invidious position after "Mr Kinghorn had spoken" in late August/early September 1998, is the matter of Mr Murray's stating that he was not fully aware of the implicit meaning of the valuation term "fully informed" at the time of entering into the Shareholders' Agreement. 193 Mr Fernon submitted that insofar as it was possible to assert any waiver at all, the extent of such possible waiver was as to the term "fully informed". It was also contended by him that one answer, given to an otherwise objectionable question (but not objected to) in a flurry of cross-examination, would not justify waiver of privilege. 194 There may be circumstances where that last submission might have merit. In this case, Mr Murray had, at the instance of Mr Foster, been given, early in cross-examination, the opportunity to receive specific advice from his counsel, Mr Slattery, as to client legal privilege. Mr Murray took that advice to heart, as can be seen by the fact that he frequently countered Mr Foster's questions with his own question: "Are you asking me about my legal advice?" 195 Mr Fernon's submission that if that finding were made, any order for disclosure of it to the respondents should be limited to the phrase "fully informed". I do not think that advice as to that phrase is realistically severable from advice received by the applicants in relation to the Shareholders' Agreement. As was said in Maurice (at 488): 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: see Great Atlantic Insurance Co v Home Insurance Co (52). 196 I find that in relation to his evidence that "I wasn't then fully aware of the implied meaning or the implicit meaning of, in a valuation term, "fully informed" ", Mr Murray waived privilege in relation to the legal advice he had in relation to the Shareholders' Agreement. Applicant's state of mind in relation to the use of 30 June 1998 as the valuation date 197 This is the fourth instance of alleged waiver of privilege by Mr Murray: (d) Mr Murray has put in issue his state of mind in relation to his reference in his letter of resignation to 30 June 1998 and whether he was thereby intending to propose that that date be used as the date of the valuation of the MacDome shares, at a time when he was being advised by Cutler Hughes & Harris and so has waived privilege in any advice provided by that firm in relation to that aspect of the Shareholders' Agreement and his letter of resignation. Submissions - Respondent 198 The applicant's case includes the assertion that the shares ought to have been valued, not as at 30 June 1998, but as at 8 February 1999. 199 The respondents, however, assert that 30 June 1998 was the date which is the one that was agreed freely and without any suggestion of impropriety or undue influence or anything else. Indeed it was Mr Murray's suggestion. 200 Mr Murray's letter of resignation dated 28 July 1998 suggested it would be best if his resignation operated "from 30 June 1998". He said in his evidence-in-chief that this was chosen by him as the date from which his resignation was to take effect in order to save RentWorks the expense of an additional audit which would otherwise have had to be completed. 201 He admitted in cross-examination that the relevance of 30 June being the audit date was that the valuation is done as at that date. Thereafter, however, he sought to maintain he was not contemplating in the letter of 28 July 1998 that any valuation be required and that it was not his view as at that date that the valuation should be done at 30 June and that the reference in the letter of 30 June 1998 "was not for the purposes of seeking a valuation". 202 Of course one of the matters that was put to him in that context was that he had voluntarily opted for 30 June 1998 because he saw at the time he was having this conversation in July that it was in his interests to do that because it was more likely to produce a valuation earlier because the auditors would be operating on the accounts as at 30 June. That would be ultimately the respondent's submission about why he chose 30 June and why he should be held to that. 203 It is submitted by evidence at page 899 that Mr Murray has put in issue his state of mind in making reference in the letter of 28 July 1998 to 30 June 1998. The issue is potentially an important one in the context of the proceedings as the valuation of the shares may vary significantly depending on the date which is chosen. It does, because different considerations apply even in the short time between 30 June and February 1999, principally because of the South African situation, but the perception the South African situation going forward was very different from the perception as at June. There is no issue between the valuers that it really should not be taken into account in any substantive way if the valuation date is 30 June, but Mr Banks advocates it should be taken into account in a significant way if the valuation date is February. It is admitted by Mr Murray that the resignation letter was drafted by him with the assistance and advice of Mr Chalmers. It must have contributed to his state of mind in making reference to the June date. It would be unfair to the respondents if they were unable to test his assertions as to his state of mind in that regard without having access to the written record of that advice and assistance. 204 The applicants have therefore waived privilege over any record of advice and assistance given to them by Cutler Hughes & Harris in relation to the drafting of the letter of 28 July 1998. Submissions - Reply - Respondents 205 The applicants put that this is the respondents' issue. 206 There was in the applicants' opening reliance placed upon a number of different dates, which dates were considered by Mr Banks in his reports. 207 Ultimately, it was 8 February 1999 which was the date for which preference was allocated by the applicants as the appropriate day. That seems to be the applicants' case now, although, again, there is no abandonment of the alternative dates as propounded in the evidence and as opened to the Court. 208 Clearly the applicant seeks an award or relief upon the basis that alternative dates other than the one at which the PriceWaterhouse valuation was done, June 30 1998, should be the date at which the valuation is to be looked at. One has to look at the evidence and the grounds in order to understand the case as it is truly being put. 209 It is very clear that the applicant raises the proposition that 30 June 1998 is not the correct date, and does so, not directly in the pleading, but by way of evidence. It was in that context that he was cross-examined and the evidence which is alluded to in the respondents' submission was elicited from him about his agreement to June 30 as the appropriate date. 210 He raises the issue. He does not accept what the respondents put to him as a reasonable, and the only proper, interpretation of his own letter, and he advances to the Court as part of his own case the fact that that letter was drawn with the assistance of Cutler Hughes & Harris. 211 It is the clearest case of issue waiver because the respondents are entitled to know why it is that Mr Murray gives the evidence he gives, which seems to contradict the letter which was drawn on the advice of his solicitors and which had the input of his solicitors at that point. His state of mind as to the date which he wanted and as to the date which he was advocating is an issue which he raises. Because the respondents short answer to this case that is being put against them is, well, why should the Commission pick another date, when Mr Murray voluntarily, in his own interest fully understanding the implications of it, chose 30 June. 212 There is no common ground about it at the moment. It is an issue that is propounded by the applicant and the respondents are entitled, when the applicant asserts that he did not intend, by writing that letter, to plump for 30 June, to look at what contributed to his state of mind which he prays in aid on that question in order to test the worth of his evidence and that is a classic case of issue waiver. 213 The date remains an issue and his intentions, as reflected in that letter, contributed to by the advice from Cutler Hughes, makes that material disclosable. Applicants' state of mind in relation to the use of 30 June 1998 as the valuation date 214 The applicants' reply to those submissions is very brief: Mr Murray has not put in issue his state of mind in making reference to 30 June 1998 in his letter of 28 July 1998 cf respondents' submission para 45. The relevant date for the valuation is an issue in the proceedings, not Mr Murray's state of mind in relation to that date. 215 The fourth issue described in the respondents' submission is the respondents' issue. 216 And so, again, the respondents' submission proceeds upon a false basis. 217 If it is that the respondent is seeking to rely on some disclosure of some kind here, it is plain, when one reads on from page 887 that Mr Murray is not referring to a valuation, as it were, under clause 4. He is talking about the annual audit as at 30 June. He answered "That valuation is done at 30 June." It is then, as it were, left. There is no further questioning or evidence in relation to that sentence, and what the respondent seems to do is to latch on to that word, as it were, in the absence of any other material, to assert that there is a waiver. 218 There is no waiver. There is no relevant issue, and there is no disclosure of advice. There is no disclosure of the effect of advice such as would give rise to a waiver in the normal course. Additional Submissions - Applicant 219 The parties seem to have been at some perhaps cross purposes about this question of the date. The date of the valuation is an issue, there is no doubt about that. But it does not follow from that that Mr Murray's state of mind about that is an issue. 220 What the respondents' submission seems to do is to elide the two ideas together. They are separate ideas. Caution is appropriate in addressing an issue arising on a party's state of mind. When the issue is the relevant date, and what the Commission considers is the appropriate relevant date, it is submitted that Mr Murray's state of mind in relation to that is not the relevant issue. Where Mr Murray's state of mind is not the relevant issue, questions of issue waiver and the like just do not arise. The Transcript relied upon 221 The applicants at page 887 put that it is clear from what is on that page that in the giving of evidence at that point Mr Murray was not referring to a valuation under clause 4. The respondents submitted that he was, but, if there is any doubt about it, said that at page 896, a few pages further along but in the general area of the issue, when looked at that together with what goes before, it is very clear what Mr Murray was talking about. At page 896, line 10, Mr Foster asked him a question after he had introduced clause 2.4 and put this to him at line 16 or 17: "Q. I'm asking you about your view as a fact. You understand that, don't you? Just ignore the letter and listen to the question. Was it your view, as at the date you had your meeting on 28 July 1998 with Mr Kinghorn, that if a valuation had to be done under the Shareholders' Agreement, it should be done as at 30 June? A. No, that wasn't my view. Q. I suggest it was, do you want to reconsider it? A. No. Q. I want to suggest to you that that is why you referred to your resignation as to have effect from 30 June? A. No. Q. And why I suggest... A. That was not the reason." 222 And then at line 44: "Q. You had, I suggest, that desire because you well understood that it would be easier and more expeditious to do the valuation as at that date because that was the end of the financial year of the company; what do you say about that? A. Well, going back to the letter, the way I was looking to sell the shares was under clause 2.4." 223 Mr Foster put some more questions to him and then at page 897 line 16: "Q. And you knew that if clause 4 was triggered there would need to be a valuation done? A. Unless the parties couldn't agree to the fair market value." 224 Mr Foster submitted that that is an answer which is in the positive. That is the only qualification. Mr Foster then put to him: "Q. Well there wasn't much chance of that? A. Well, yes, there was a valuation to be done." 225 Mr Fernon said that the respondent seems to rely upon Mr Murray's evidence, at page 887 about the valuation. 226 In the question which appears on the bottom of the previous page, page 886, it is suggested by Mr Foster to Mr Murray: Q. And the only reason you mentioned the convenience of the company was to indicate to Mr Kinghorn that if he would prefer another date, you were open to suggestions; isn't that the case? A. No, I think you're misinterpreting what I've written there. 227 Then he is asked: Q. What is the relevance of the audit to the matter that you are dealing with in that sentence? A. Well, it is the end of the financial year and there is an annual audit at 30 June. Q. And what is the relevance of that to the subject matter of this sentence? A. That the valuation is done at 30 June. Q. So you had in mind, did you, when you wrote this letter, that there would need to be a valuation? A. I don't recall. Consideration 228 I can deal with this issue shortly. Having examined the transcript relied upon by both parties, I do not accept that, Mr Murray has put his state of mind in issue as to the use of 30 June 1998 as the valuation date. Certainly the "relevant", to use the applicants' terminology, date, or the "fair", to use the respondents' terminology, date is an issue in the proceedings. 229 The document, one would think, speaks for itself. Mr Murray's evidence was that he accepted that a valuation was to be done, but he denied that the reasons put to him by Mr Foster were those for which he referred to the date of 30 June 1998 in his letter of resignation. 230 Even if I did accept that Mr Murray had put in issue his state of mind on this aspect of the case, I would adopt an approach different from that sought by the respondents. 231 In Telstra (at 167), Branson and Lehane JJ stated: Nor is it a consequence of the principle that whenever a person's state of mind is relevant to an issue in proceedings, privilege is taken to be waived in relation to legal advice that may have played part in the formation of that state of mind (so that the principle does not, for example, deny the authority of Kennedy v Lyell (1883) 23 Ch D 387; Lyell v Kennedy (No 2) (1883) 9 App Cas 81). 232 In relation to this aspect of the respondents' claims as to waiver, I find apposite the approach of Hodgson CJinEq in Wayne Lawrence Pty Limited v Hunt & Ors t/a Hunt Musgrave & Peach [1999] NSWSC 1044 (19 October 1999) and I adopt that approach: 12 Accepting that the decision of the majority in that case [Telstra] correctly interprets and applies s.122(1), it seems to me still that the question of whether the advancing of a person's state of mind is to be taken as consenting to the giving of evidence of confidential communication, or as waiving privilege, is a matter of degree in each case. It does not seem to me that the assertion of a belief must, in all circumstances, be taken as consenting to evidence being led of any legal advice or confidential communication that could be relevant to whether such a belief was held or the reasonableness of such belief. It seems to me that factors relevant to whether that consent is to be considered as having been given, or whether privilege is taken to have been waived, would include the significance of the belief to the case as a whole; the relevance of the reasonableness of the belief to the case as a whole; the probability or otherwise of the legal advice being relevant to the holding of that belief, or being relevant to its reasonableness; … It seems to me that, on the basis of all those matters at least, the Court has to make a judgment as to what is reasonable, and what is fair in the particular case. … 15 It appears to be the law that where legal professional privilege or other privilege is claimed, that of itself cannot be the basis of an adverse inference being drawn against the party claiming that privilege. However, in my opinion, where a party is claiming to make out a case, and that party bears the onus of proof, and where that case could be given positive support by calling evidence of legal advice or lack of legal advice, the failure of that party to call that evidence can be taken into account in deciding whether that party has discharged the onus of proof which it bears. The plaintiff's solicitor accepted that this was so during argument [not the case here]. I take that view into account in reaching the conclusion that I do reach, because my view that the upholding of privilege does not involve unfairness to the defendant does depend upon my view that the defendant is not precluded from commenting on, and relying on, the failure of the plaintiff to support its case by giving evidence about its legal advice, or lack of legal advice, on this point. The applicants' wishes in relation to the sale and transfer of the shares. 233 This is the fifth instance in which the respondents allege that Mr Murray has waived privilege: (e) Mr Murray has put in issue his state of mind in the period January to March 1999 in relation to his desire to stop the sale and transfer of the shares from proceeding at the valuation figure at a time when he was receiving advice from Harmers which again is likely to have contributed to that state of mind and thereby waived privilege; Submissions - Respondents 234 An important element in the applicants' case of unfairness is the allegation that the transfer occurred in circumstances where MacDome had expressed disagreement with the valuation and made "strong protestations" about the sale and transfer. The applicants' case in this regard is that they never consented to the sale and were not prepared to acquiesce in it but rather they vigorously opposed it and therefore it took place contrary to their wishes and there are some grounds which assert that (particulars (xviii) and (xix) ). 235 As part of their answer to this case the respondents will say that Mr Murray's purported disagreement with the valuation and protests that the transfer of the shares ought not to occur were not bona fide and that he planned from the beginning of the process to engineer the situation in which shares were transferred at the PriceWaterhouse valuation, with him reserving to himself the ability to pursue a claim such as the one presently before the Commission. The respondents put those things to Mr Murray in cross-examination. 236 The letter of 6 January 1999 is really capable of two possible constructions. One is that Mr Murray was making an offer to expedite the transaction by agreeing to the valuation price provided that payment was made promptly, and that if that happened there would be no other problem or disputation. That is one view of the letter. Of course if that is the correct view of the letter, it demonstrates very clearly that Mr Murray was content for the valuation at the broad level. He was prepared to accept that figure provided it was paid promptly. 237 The other view of it is that it was really just another brick in the wall of Mr Murray's plan to create a state of affairs where he could nail down the transaction and get the commitment Mr Kinghorn and Mr Medway to buy the shares at that price but preserve to himself the right to bring a s 106 action. 238 The applicants seek to support their case that the transfer took place over their "strong protestations" by having Mr Murray put in evidence various letters of his solicitors (all of which he swears were sent on his instructions) purporting to take the position that he wanted the transfer process pursuant to clause 4 stopped and on one occasion specifically threatening interlocutory proceedings to obtain an injunction. Implicitly it is asserted that the statements made therein reflected the bona fide wishes of the applicants. It is striking, however, that notwithstanding those threats, nothing was in fact done by the applicants to obtain an interlocutory injunction to restrain the transfer of the shares. When asked in cross-examination why that was, Mr Murray took refuge saying the decision was made on legal advice. This really throws up a classic case of issue waiver. 239 The bona fides of these communications are challenged, so that the state of mind of the applicants in the period from 4 January 1999 to 2 March 1999 in relation to the valuation and to the proposed sale and transfer of the shares is in issue in the proceedings. It is clear that during this period the applicants were receiving legal advice from Harmers which is likely to contributed to their state of mind regarding those issues. Mr Murray in his cross-examination took refuge in that advice (see Gough & Gilmour (No 1) at [28]). 240 The applicants have therefore waived privilege over any communications with Harmers in the period up to 2 March 1999 which related to any proposal to stop or restrain the transfer of MacDome's shares in RentWorks. Submissions - Reply - Respondents 241 In particulars (xvii), (xviii) and (xix) there are raised matters concerning the progress of the working out of the Shareholders' Agreement through the offering of the shares and ultimately the transfer of them. In particular (xix) it is said that: "The purported sale and transfer of the second applicant's shares by the first respondent as the second applicant's attorney, despite strong protestations from the second applicant and its solicitors, is a ground of unfairness." 242 Mr Murray, and thus MacDome, come to the Commission and bring an issue in those terms - that is, "Something occurred over our strong protestations." He was cross-examined about that, not to test the issue but to test the worth of that issue. In the course of that cross-examination he conducted himself in a way which has rendered liable to disclosure the truth about the way in which that correspondence came forward. 243 Particular (xix) shows that, contrary to the applicants' submissions, it is the applicants' issue, not one raised by the respondents in cross-examination. 244 The applicants said that there was a difference between considering courses of action and carrying them out. What occurred here, in any event, is not properly characterised in that way. What occurred here was a clear threat, in open correspondence, which was never carried out and was never intended to be carried out and which is now being used as the foundation for another ground of unfairness. Therefore the ground of unfairness which is raised based upon it is simply an illusion, a sham. The Applicants' wishes in relation to the sale and transfer of the shares Submissions - Applicants 245 The applicants' response to those submissions was that the applicants' case is found in the Amended Summons - see paras (xviii) and (xix). Each complains of the conduct of the respondent. 246 It seems that what the respondent seeks to do is to raise this issue, namely, to challenge the bona fides of Mr Murray in relation to what is said to be his purported disagreement with the valuation and protests that the transfer of shares ought not to occur. 247 This is the respondents' issue that is raised in cross-examination. This is not conduct of the applicants that is inconsistent with the maintenance of privilege. A waiver does not occur because the respondent wishes to raise an issue. 248 What Mr Murray does, and what is referred to in the respondents' submissions is, in response to questions, it is said, take refuge in a decision being made on legal advice. There is nothing untoward, unusual or improper about a witness indicating that he has taken legal advice and is relying upon that advice and, indeed, claiming the privilege. That is what Mr Murray is there doing. If the contention for the respondent was followed through to its inevitable end, it would have the effect of rendering legal professional privilege a meaningless notion. 249 If it is said that there is any disclosure and that any waiver arises from that source, again, it is submitted that the effect of the evidence is not revealed in the respondents' submission or at all in relation to this matter. 250 It is submitted by way of support in the respondents' written submission that it is striking that, notwithstanding the threats in relation to interlocutory applications, nothing was in fact done. It is difficult to see where that submission leads. General experience of matters will see many instances where various things are considered or may be considered in litigation generally. It is plain that often various courses can be suggested in correspondence which come to nothing. 251 Interlocutory applications may or may not be pursued for a variety of different reasons. The considerations that go to that are plainly matters of legal professional privilege. To suggest that it is striking that an interlocutory application did not occur in this case, misunderstands the way in which legal professional privilege works and the way in which advice is taken and considered by clients and parties to litigation generally. Consideration 252 The relevant particulars are set out below: xvii) The tabling of the final valuation by the Board of the first respondent when the applicants had not approved it and had clearly expressed disagreement with it. xviii) The actions of the Board of the first respondent in instructing the Secretary to offer the second applicant's shares for sale when the second applicant had not approved the valuation and had expressed disagreement with it. xix) The purported sale and transfer of the second applicant's shares by the first respondent as the second applicant's attorney despite strong protestations from the second applicant and its solicitors. 253 It is true, as was submitted by Mr Fernon, that interlocutory applications may be foreshadowed but not eventually pursued for various forensic reasons in the course of the litigation between the parties. However, in this case, the situation is somewhat different from that normally applying. One of the particulars of the respondents' conduct alleged by the applicants to be of itself either unfair or which rendered the Terms of the Shareholders' Agreement unfair was set out in (xix) which said, to reverse its exact terms, that "despite strong protestations from the second applicant and its solicitors", the purported sale and transfer of the second applicant's shares by the first respondent as the second applicant's attorney, took place. 254 It seems to me that, on examination, the respondents really advance two issues here, one being that of the applicants, the second that of the respondents. The applicants' issue is the disagreement with the valuation and their desire to stop the sale and transfer of the shares. The respondents' issue is that the applicants' purported disagreement with the valuation and "protests" to stop the sale were not bona fide but were part of their laying the ground for an application pursuant to s 106 against the respondents. 255 At a number of times in his submissions Mr Fernon asserted that a number of issues, in relation to which waiver had been said to have occurred, did not arise as part of the applicants' case, but were ones raised by the respondents. 256 Section 122 does not differentiate as to the question of waiver as to whether a particular issue arises in the course of the applicants' or of the respondents' case. Insofar as is now relevant, it provides for loss of client legal privilege in the circumstances there set out in s 122(2) and s 122(4). 257 The question to be decided is whether, in accordance with the relevant principles, has loss of client legal privilege occurred in respect of a relevant issue in the proceeding?. Something more than admissions that legal advice has been received is required. There must be some reference either to that advice or to the effect of it. 258 Upon examination of the material, including the transcript references relied upon by the respondents I am unable to conclude that there has been either issue waiver or document waiver by Mr Murray in relation to the issue raised by the applicants. I accept that an issue as to the bona fides of a party would not of itself give rise to waiver of privilege. As to the issue raised by the respondents that is a matter for submissions based on the evidence. A party to litigation is not entitled to get behind legal professional privilege simply because it cross examines upon a subject matter. Applicants' understanding and advice re potential capital gains tax liability 259 This is the sixth instance of alleged waiver of privilege by Mr Murray: (f) Mr Murray has put in issue his understanding of MacDome's potential liability to pay capital gains tax on its sale of the shares in RentWorks, an understanding which has been contributed to at various times by advice from at least Cutler Hughes & Harris, Dibbs Crowther & Osborne and Mallesons Stephen Jaques and possibly also Harmers. 260 This issue has been completely overtaken by a further amendment to the Summons for Relief, which had the effect of deleting from it claims 2A and Particulars D1(b) and D1(d). It was on those parts of the Summons that the respondents based their claim that privilege had been waived by Mr Murray. 261 Despite those deletions, the respondents pressed their claim that the documents sought should be produced. Submissions - Respondent 262 Waiver is an event which, having occurred, cannot be "undone". When a party once has acted in a manner inconsistent with the maintenance of the privilege, he or she has waived that privilege and cannot restore it by unilaterally asserting that he or she will thenceforth proceed on some other basis. 263 In the context of the extant application by the respondents, this has two elements - disclosure waiver and issue waiver. In that regard, it is submitted, first, that it is clear beyond argument that a privileged communication, once disclosed, loses its privilege once and for all and, secondly, that what is true for disclosure waiver is true also for "issue" waiver. 264 By putting in issue Mr Murray's state of mind in relation to the taxation implications of the transfer of MacDome's shares, and then persisting with that position long after the respondents' position as to the implications of this had been made clear, the applicants have irrevocably waived their right to protect the material in question from disclosure on the basis of client legal privilege. 265 This change of heart by the applicants does not change the submissions the respondents have put as to why it is these documents in the class being dealt with in the original submissions should be still made available to the respondents. 266 The abandonment of the claims for relief in relation to the taxation affairs of the applicants cannot operate retrospectively - the withdrawal of those claims now does not mean that they should be regarded as never having been made. 267 A fortiori this is the case where the Court is exercising as wide a jurisdiction of fairness as that under s 106 of the Industrial Relations Act as Boland J observed in Gough & Gilmour Holdings Pty Ltd v Caterpillar of Australia (No 7) (2001) 109 IR 19, para 47: In assessing whether there was unfairness and what might be an appropriate remedy, if any, it is necessary for the Court to consider not only the conduct of the respondents but also the conduct of the applicants. 268 In a case where a waiver had occurred to a subject matter in terms of classes of documents in respect of which the waiver occurred plainly or clearly had no conceivable relevance to any issue in the proceedings, the Court may find that waiver had occurred but deny access to the party claiming to see the documents on discretionary grounds at the point of access. 269 In a case, however, which the present one is where it is not plainly no longer relevant the respondents are entitled to be the ones to decide what is relevant and what is not in terms of this matter. They are entitled to that material to look at it and use it as they see fit in accordance with proper ethical principles and then if they seek to tender a document that has no relevance, the Court will reject it. 270 That is very unlikely to happen here because these documents will almost certainly or potentially contain admissions. They will affect Mr Murray's credit in terms of the way in which he has gone about this whole case and everything that goes with it and all those matters are still matters which arise in the proceedings. 271 In the context of the claim he makes the mere fact they abandoned part of it does not change anything. Submissions - Applicant 272 Mr Fernon submitted that the effect of the amendment is to remove as an issue, any claim for compensation for liability that the applicants may have had to the Australian Taxation Office. 273 If there was a disclosure, a matter not conceded by the applicants, but even if that was a disclosure, it is not a disclosure relating to an issue in the proceedings and in those circumstances would not give rise to the waiver of any legal professional privilege. 274 The point is short. There is no longer an issue by reason of the amendments to the Summons for Relief and by reason of that there is no occasion for any waiver of legal professional privilege attaching to the documents of the class sought by the respondents under that heading. 275 The subject matter of the report from Mr Baltins deals with issues now no longer relevant in the proceedings. What the applicants said in argument of course, was it did not amount to disclosure in any event, but in the way in which the evidence unfolded, if there was any technical disclosure evidences of that kind, anything technical and accidental, that would be apparent from a reading of the transcript where Mr Murray repeatedly sought to clarify whether or not he was asked for legal advice so as to maintain his privilege. Now in circumstances where the issue does not even arise in the proceedings, any waiver of privilege could not be sustained. 276 What is plain as a pikestaff as a result of the amendment made is that these issues arising under the last head described as Capital Gains Tax head, no longer arise. What relevance can such documents have to even the respondents or the Court where that issue does not arise. One of the hallmarks of consideration of fairness leads to the conclusion that privilege would be maintained because the issues are not before the Court. 277 If the issues are not before the Court irrespective of the privilege issue, another party in the proceedings would not normally be entitled to the documents. It is all the more the case where the document in question was the subject of a claim for privilege. A claim for privilege which is acknowledged to be a legitmate claim but said to have been waived. 278 It is necessary to look at the parameters of the litigation before the Commission. Where issues that are relied upon do not arise then there is no entitlement to otherwise privileged material. Privileged material in the circumstances cannot be relevant because it is not concerned with an issue. 279 When the claim for waiver was advanced, it was quite plain that the respondents advanced it othe basis they did in the written submission which is concerned with issues arising from the claims that are now no longer advanced. That was the basis upon which they claimed waiver. 280 The way in which the extra bit is added on in those submissions put by the respondents namely that it is somehow intertwined with other matters in the proceedings, is not the case. It is not the way in which the case was run in the first place. This demonstrates the fact it is not the case and secondly even if it were intertwined in some way, which is not clear, the applicants submit from the submission that has been put that that is so tangential as not to define any waiver. 281 The principal point is the way in which the respondents advanced their claim is the way in which it should be looked at and the way in which they advanced their claim is concerned with claims that are now no longer before the Court. Consideration 282 In relation to this issue I accept the submissions made by the applicant. The issue is no longer pressed and is therefore not a relevant issue in these proceedings. 283 I make no ruling as to whether waiver of privilege had occurred in relation to the issue described as the "applicant's understanding and advice re potential gains tax liability". Orders 284 The Commission orders that: 1 Within twenty-one (21) days of the date of these orders the applicants produce to the Commission or to the Industrial Registrar and make available for inspection by the respondents those documents (i) in relation to legal advice provided to the applicants in relation to the Shareholders' Agreement from Cutler Hughes and Harris and/or Harmers; (ii) all legal advice that the applicants received before or after 28 July 1998 and until 22 December 1998 as to the choices open to them in relation to the valuation/transfer/sale of their shares in RentWorks, either in accordance with the Shareholders' Agreement, including the operation of cl 2 and cl 4 of the Shareholders' Agreement, or otherwise. 2 The respondents have access to all documents produced pursuant to Order 1 hereof, such access to include uplifting for the purpose of photocopying by arrangement with the Associate to Glynn J or with the Industrial Registrar. 3 All parties have liberty to apply on three (3) days' written notice to the other parties. 4 The question of costs of the respondents' application for the production of document determined by these Orders is reserved. 285 In relation to the Order, "documents" includes letters, memoranda, facsimile transmissions, records of facsimile transmissions, file notes, notes, notebooks, diaries, diary entries, timesheets, time records, memoranda of fees, emails, reports, electronic records and copies thereof. (1) All documents constituting or recording communications between or on behalf of Christopher Murray and MacDome Pty Limited, or either of them, on the one hand, and any member, employee, agent or officer of Harmers on the other hand, created or dated at any time between 1 June 1998 and 22 December 1998 which communications refer to or relate to: (a) the true construction or interpretation of Shareholders Agreement dated 15 June 1998 between RentWorks Limited, J A Kinghorn & Co Pty Limited, MacDome Pty Limited, Thumdart Pty Limited, Christopher Murray and Robert Medway (hereinafter called "the Shareholders' Agreement"); (b) the sale or transfer or possible, potential or prospective sale or transfer of all or any of the shares held in 1998 by MacDome Pty Limited in RentWorks Limited (which shares are hereinafter called "the sale shares"); (c) the valuation of the sale shares by PriceWaterhouseCoopers; (d) the participation by Christopher Murray and MacDome Pty Limited in the process of valuing the sale shares by PriceWaterhouseCoopers; (e) the steps which Christopher Murray or MacDome Pty Limited could, should or might take as a result of or arising out of the resignation of Christopher Murray as an employee of RentWorks Limited, and the resignation of Christopher Murray as a director of RentWorks Limited insofar as the valuation of the sale shares; (f) without limiting sub-paragraph (e) above, the steps which Christopher Murray or MacDome Pty Limited could, should or might take from time to time during the period when PriceWaterhouseCoopers were in the course of valuing the sale shares in respect of (i) the valuation of the said shares; (ii) their participation in the process whereby the sale shares were to be valued; and (iii) the participation of others in the process whereby the sale shares were to be valued; (g) without limiting sub-paragraphs (e) or (f) above, any litigation or proceedings which they, or either of them, could or might bring in connection with the sale or transfer of the sale shares, the proposed, potential or threatened sale or transfer of the sale shares, the valuation of the sale shares. (h) Such of the documents contained within Exhibit 49 unmasked and the documents referred to in all lists of privileged documents contained within Exhibit 49 unmasked, as come within the documents now ordered to be produced. 286 The parties are to co-operate in compiling a list of all the documents produced pursuant to Order 1.

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