JUDGMENT
Jagot J:
Introduction
1 The motion before me (filed by the respondent Council) raises a question whether the applicants' legal professional privilege over certain communications with their (then) solicitor may be maintained or has been waived.
2 The applicants, Clayton Jacobson and Lee Anne McMillan, appealed against an order served by Ballina Shire Council ("the Council") under s 124 of the Local Government Act 1993 (item 22 of the Table to that section). The order related to the storage, treatment, processing, collection, removal and disposal of wastewater on land known as No's 14 - 22 Smith Drive, West Ballina.
3 The applicants filed the appeal against the order on 24 November 2004 (s 180 of the Local Government Act 1993 provides that a person on whom an order is served may appeal against the order to the Land and Environment Court.)
4 Consent orders were entered in the Court dated 8 April 2005. Those consent orders provided:
(1) The Applicant discontinues these proceedings.
(2) The Applicant shall comply with the Order of the Respondent dated 21 October 2004 made under s 124 of the Local Government Act, 1993 in respect of premises situated at Lot 1 DP605260, No. 14 Smith Drive, West Ballina, NSW within thirty (30) days.
(3) The Applicant shall pay the respondent's party/party costs in the sum of $5,720.00 inclusive of GST and inclusive of disbursements within thirty (30) days.
5 The consent orders are: - (i) signed above the words "Solicitor for the Applicant" and "Solicitor for the Respondent", (ii) bear the date 8 April 2005, (iii) bear a filed date stamp of the Court of 18 April 2005, the Court seal and the signature of the Assistant Registrar with a handwritten date of 18 April 2005.
6 On 30 June 2005, the applicants (represented by a different solicitor) filed a notice of motion seeking an order in para (1) that:
...the purported consent orders made by this Court on 8 April 2005 and annexed at "A" be set aside …,
on the grounds set out in the affidavit of Clayton Jacobson and the affidavit of Lee Anne McMillan sworn 28 June 2005.
7 The basis upon which the applicants seek to set aside the consent orders is their contention that they did not authorise their then solicitor to discontinue the proceedings or to consent to an order that they pay the respondent's costs or (indeed) to sign any consent orders on their behalf.
8 Mr Jacobson's affidavit annexes certain correspondence between the applicants, the Council and their various legal representatives. The correspondence includes (as annexure "C") a handwritten facsimile dated 15 June 2005 to Mark Flynn (the applicants' then solicitor) from "Clay and Leanne" stating:
Mark - please review. Something very wrong has happened. Please call after review.
9 Annexure "D" to Mr Jacobson's affidavit is a facsimile to Mark Flynn from "Clay" dated 16 June 2005 stating:
Mark,
Asking again. Something very wrong has happened. Has my position been compromised, without recourse?
What is our condition? This is unbelievable, what am I reading?
Please advise post haste. This is very stressful.
Report on inspection to follow.
Clay.
10 The applicants served a subpoena dated 5 August 2005 on Mark Flynn, as principal and proper officer of Mark Flynn and Associates Pty Ltd. The subpoena required production of:
Client file maintained for and on behalf of the applicants by Mark Flynn and Associates bearing reference number MF:KT:29604, including but not limited to pleadings, notes, reports, memoranda, correspondence including copy letters, file notes, copy email transmissions, including replies and briefs to counsel.
11 The recipient answered the subpoena.
12 The applicants were granted first access to the documents. Mr William John Grace, the solicitor for the Council, swore an affidavit on 10 February 2006 annexing correspondence between his firm (representing the Council) and the new solicitor for the applicants. The correspondence relates to a claim for privilege made by the applicants over a number of the documents produced by their former solicitor in answer to the applicants' subpoena. The documents the subject of this claim for legal professional privilege are identified in annexure K to the affidavit of Mr Grace. Those documents comprise (in the main) correspondence between the applicants (on the letterhead of a company which the applicants control, Aero Marina Pty Limited) and their (then) solicitor between March 2004 and May 2005 and file notes within the same period.
13 The applicants (who now represent themselves) maintain their claim for privilege over the documents listed in annexure "K" to Mr Grace's affidavit. I granted the Council leave to file in Court a notice of motion which sought the following orders:
(1) The applicant on the motion be granted access to all of the documents produced by Mark Flynn and Associates pursuant to subpoena to this honourable Court.
(2) That the applicant on the motion be granted liberty to inspect the entire file produced by Mark Flynn and Associates pursuant to subpoena to this honourable Court, and other orders which are not presently relevant.
Submissions
14 Mr Jacobson (who speaks on his own behalf and on behalf of Ms McMillan, who is also present in Court) maintains the claim for privilege on two grounds: - (i) the documents sought by the Council are "too late and too little", and (ii) the documents are not relevant and would not make any difference to the outcome of the applicants' motion to set aside the consent orders. I understand the first submission to be a variant of the second.
15 The Council submits that the claim for privilege over the documents cannot be maintained as privilege has been waived on one or more of three bases: - (i) by operation of the Evidence Act 1995, s 122, (ii) by operation of the doctrine of issue waiver, and (iii) by operation of the doctrine of communications (or disclosure) waiver. The Council does not dispute that the documents enjoyed the status of privileged communications, but submits that the privilege has been waived.
Principles
Legal professional privilege applies
16 Section 38 of the Land and Environment Court Act 1979 provides (in part) that:
(1) Proceedings in Class 1, 2 or 3 of the Court's jurisdiction shall be conducted with as little formality and technicality, and with as much expedition, as the requirements of this Act and of every other relevant enactment and as the proper consideration of the matters before the Court permit.
(2) In proceedings in Class 1, 2 or 3 of the Court's jurisdiction, the Court is not bound by the rules of evidence but may inform itself on any matter in such manner as it thinks appropriate and as the proper consideration of the matters before the Court permits.
17 Section 8 of the Evidence Act 1995 provides that that Act does not affect the operation of any other Act. In other words, the Evidence Act 1995 does not apply to proceedings in Class 2 of the Court's jurisdiction.
18 The common law doctrine of legal professional privilege applies (Baker v Campbell (1983) 153 CLR 52). But for any waiver of privilege imputed by law, the applicants would be entitled to protect their communications with their former solicitor.
Waiver of legal professional privilege
19 Privilege may be waived. Waiver may be intentional or may result from conduct or circumstances that are inconsistent with the continued confidentiality of the communications. The Council's references to issue waiver (that is, incapacity to maintain the privilege by reason of the applicants putting in issue the content of their instructions to their former solicitor) and communications or disclosure waiver (that is, waiver by reason of the applicants disclosing part of their communications with their former solicitor) identify that the Council relies on conduct and circumstances to found its case for waiver, rather than the intention of the applicants.
20 In Mann v Carnell (1999) 201 CLR 1 at [28] - [29], the High Court (Gleeson CJ, Gaudron, Gummow and Callinan JJ) said that:
[28] At common law, a person who would otherwise be entitled to the benefit of legal professional privilege may waive the privilege. It has been observed that "waiver" is a vague term, used in many senses, and that it often requires further definition according to the context. Legal professional privilege exists to protect the confidentiality of communications between lawyer and client. It is the client who is entitled to the benefit of such confidentiality, and who may relinquish that entitlement. It is inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege. Examples include disclosure by a client of the client's version of a communication with a lawyer, which entitles the lawyer to give his or her account of the communication, or the institution of proceedings for professional negligence against a lawyer, in which the lawyer's evidence as to advice given to the client will be received.
[29] Waiver may be express or implied. Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. When an affirmative answer is given to such a question, it is sometimes said that waiver is "imputed by operation of law". This means that the law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the subjective intention of the party who has lost the privilege. Thus, in Benecke v National Australia Bank the client was held to have waived privilege by giving evidence, in legal proceedings, concerning her instructions to a barrister in related proceedings, even though she apparently believed she could prevent the barrister from giving the barrister's version of those instructions. She did not subjectively intend to abandon the privilege. She may not even have turned her mind to the question. However, her intentional act was inconsistent with the maintenance of the confidentiality of the communication. 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.
21 The High Court (Deane, Dawson and Gaudron JJ) identified the most common example of conduct which could result in an imputed waiver by law in Goldberg and Another v Ng and Others (1995) 185 CLR 83 at 96:
The circumstances in which a waiver of legal professional privilege will be imputed by operation of law cannot be precisely defined in advance. The most that can be done is to identify a number of general propositions. Necessarily, the basis of such an imputed waiver will be some act or omission of the persons entitled to the benefit of the privilege. Ordinarily, that act or omission will involve or relate to a limited actual or purported disclosure of the contents of the privileged material.
22 Gibbs CJ, in Attorney-General for the Northern Territory v Maurice and Others (1986) 161 CLR 475 at 481, approved the statement in Wigmore on Evidence ((McNaughton rev. 1961), vol VIII, para 2327), that:
… regard must be had to the double elements that are predicated in every waiver, i.e., not only the element of implied intention, but also the element of fairness and consistency. A privileged person would seldom be found to waive, if his intention not to abandon could alone control the situation. There is always also the objective consideration that when his conduct touches a certain point of disclosure, fairness requires that his privilege shall cease whether he intended that result or not. He cannot be allowed, after disclosing as much as he pleases, to withhold the remainder. He may elect to withhold or to disclose, but after a certain point his election must remain final.
23 In Benecke v National Australia Bank (1993) 35 NSWLR 110 at 111, Gleeson CJ said that:
The rule that prevents an unauthorised disclosure of confidential communications between a client and a legal adviser, when such communications are for the purpose of obtaining legal advice, or for use in existing or anticipated litigation, constitutes a restriction upon the capacity of courts to ascertain the truth in certain circumstances. That restriction, however, is regarded as acceptable on the grounds that it promotes the public interest, and assists the administration of justice, by facilitating the representation of clients by legal advisers. It does this by encouraging uninhibited communication. Thus, in cases where the rule operates, one aspect of the public interest is preferred against another (discovering the truth).
24 Gleeson CJ continued:
It would be inconsistent with the reason for the existence of the privilege to permit it to operate in the manner for which the appellant contends. But for her own actions, the privilege would have enabled the appellant to insist that nobody should be able to give evidence of the confidential communications between the appellant and her senior counsel about the settlement of the first proceedings, without the consent of the appellant. However, it did not enable the appellant to make public her version of those communications and, at the same time, to enforce silence on the part of others who disagreed with that version. The law permits the search for the truth in legal proceedings to yield, in certain circumstances, to the public interest in preserving the secrecy of communications between lawyer and client. In the present case, however, the appellant herself lifted the veil of secrecy by giving her version of the communications. Thereafter, there was no reason in principle why the pursuit of the truth should not take its course, or why the Court should be inhibited in seeking to ascertain the true facts concerning those communications.
25 Clarke JA (with whom, Gleeson CJ and Sheller JA agreed), at 116 in Benecke v National Australia Bank, said that:
… The appellant, in making her assertions that her lawyers compromised her 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.
26 Clark JA, also at 116, referred to Thomason v The Council of the Municipality of Campbelltown (1939) 39 SR (NSW) 347 at 38-359, where Jordan CJ said:
…Hence, in effect, one of the issues in the case was what advice if any the plaintiff had received from her legal advisers as to her alternative legal rights. In these circumstances, since the fact and nature of the advice is an issue in the case, I am of the opinion that privilege cannot be raised to prevent the proof of that advice .
27 Benecke v National Australia Bank has been approved in a number of subsequent decisions (see, for example, Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd and Others (1995) 37 NSWLR 405 at 411, Richards v Kadian [2005] NSWCA 328 at [91] - [92], Seven Network Ltd v News Ltd (No 10) [2005] FCA 1721 at [46], Moreay Nominees Pty Ltd v McCarthy (1994) 10 WAR 293 at 297 and 302).
28 Sackville J, in Seven Network Ltd v News Ltd (No 10) [2005] FCA 1721 at [33] to [48], also reviewed a number of decisions with respect to waiver imputed by law by reason of a party advancing their own state of mind as relevant to an issue in the proceedings (Telstra Corporation Ltd & Another v BT Australasia Pty Ltd & Another (1998) 85 FCR 152 at 165, Wayne Lawrence Pty Limited v Hunt & Ors t/a Hunt Musgrave & Peach [1999] NSWSC 1044 at [12], Chen & Ors v City Convenience Leasing Pty Ltd & Anor [2005] NSWCA 297 at [41], and DSE (Holdings) Pty Ltd v Intertan Inc & Another (2003) 127 FCR 499 at [58], [61], [95] and [109]). Sackville J concluded that where legal advice is relevant to an issue in the proceedings (even if put in issue by the party claiming the privilege), inconsistency so as to effect waiver involves questions of degree.
29 McLelland J identified another aspect of the same principle in United States Surgical Corporation v Hospital Products International Pty Ltd (McLelland J, NSWSC, 13 October 1981, unreported). He cited the statement of Mustill J in Nea Karteria Maritime Co v Atlantic and Great Lakes Steamship Corp [1981] Commercial Law Reports 138 at 139 (approved by the English Court of Appeal in Great Atlantic Insurance v Home Insurance [1981] 1 WLR 529 at 538, that:
… where a party is deploying in court material which would otherwise be privileged, the opposite party and the court must have an opportunity of satisfying themselves that what the party has chosen to release from privilege represents the whole of the material relevant to the issue in question. To allow an individual item to be plucked out of context would be to risk injustice through its real weight or meaning being misunderstood .
30 Austin J, in Australian Securities and Investments Commission v Rich [2004] NSWSC 923 at [12], referred with approval to the observation of Hely J in Fort Dodge Australia Pty Limited v Nature Vet Pty Ltd [2002] FCA 501 at [10], where his Honour said:
… However, there is little difference between the issue as to whether a party has given its implied "consent" to the disclosure of the substance of the evidence over which privilege is claimed (as that term is used in s 122 of the Act and whether a party's conduct amounts to an imputed waiver at common law : Garratt's Ltd v Thanga Thangathurai [2002] NSWSC 93 per Bergin J at [51]. 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: Mann v Carnell (1999) 201 CLR 1 at 13.
31 At [14], Austin J also accepted a submission that "the principle about waiver through partial disclosure of a privileged communication applies not only where the disclosure takes place during the evidence at the final hearing, but also where it occurs in response to a notice to produce." I agree. The principle also applies to the inspection of documents produced under subpoena.
Application of principles
32 The applicants in this matter seek to set aside consent orders on the basis that they did not instruct their (then) solicitor to enter into those orders. To support this contention, the applicants have chosen to waive privilege over two communications to their solicitor. Inconsistency so as to effect waiver involves questions of degree (see Attorney-General for the Northern Territory v Maurice and Others (1986) 161 CLR 475 at 481 and Seven Network Ltd v News Ltd (No 10) [2005] FCA 1721 at [48]).
33 I am satisfied that the applicants' course of conduct in this matter has the necessary result that there has been an imputed waiver of privilege over their communications with their (then) solicitor. Maintenance of the privilege is inconsistent with the applicants' conduct by reason of: - (i) the applicants putting in issue their instructions to their (then) solicitor, and (ii) the applicants electing to waive privilege over part of their communications with their (then) solicitor.
34 Consistent with the reasoning in Benecke v National Australia Bank at 111, the applicants (in the circumstances of this matter) are not able to make public their version of the communications with their solicitor and, at the same time, enforce silence on the part of others who may wish to disagree with their version. Having placed in issue their instructions to their (then) solicitor, the applicants may not "deploy in court" only those parts of their communications as they choose. To permit the applicants to do so would be unfair (in the relevant sense identified in Mann v Carnell at [29]).
35 Accordingly, I am satisfied that orders should be made in accordance with paras (1) and (2) of the Council's notice of motion dated 10 February 2006, namely: - (1) that the Council be granted access to all of the documents produced by Mark Flynn and Associates pursuant to the subpoena which was filed on 8 August 2005, and (2) that the Council be granted liberty to inspect the entire file produced by Mark Flynn and Associates pursuant to that subpoena filed on 8 August 2005.
36 The question of costs of the Council's notice of motion should be reserved.