Cotter v John Fairfax Publications Pty Ltd

(f) that as Mayor of Marrickville [the plaintiff] had deliberately so conducted himself in relation to the Council Civic Centre Development as to give a financial benefit to an architect with whom he had a private business relationship." 3 The article was headlined "Probe into Mayor's Decade of Deals" and referred to a number of property and business transactions in which the plaintiff was alleged to have been involved over the previous ten years. The plaintiff was identified as the Mayor of Marrickville. Put shortly, as the established imputations show, the author of the article suggested improper conduct on the part of the plaintiff in his capacity as Mayor, and in his involvement in Council decisions, and in particular, alleged that he deliberately so conducted himself as to give a financial benefit to an architect with whom he had a private business relationship. 4 On 15 April 1997, on the plaintiff's motion, the Council resolved to refer to its external solicitors the issue of possible conflict of pecuniary interests in relation to the plaintiff's interest in a company called Evbaca Pty Ltd and whether his shareholding in the company created a conflict of interests and any other matter involving directors of Evbaca acting on their own account or with different corporations. 5 Following the finding by the jury that the article conveyed the three defamatory imputations, the defendant filed a defence, raising defences of justification and contextual truth. It pleaded two contextual imputations which it asserts to be matters of substantial truth, and to relate to matters of public interest or, alternatively, to have been published under qualified privilege. 6 The contextual imputations pleaded by the defendant are: "(1) The plaintiff, as Mayor of Marrickville Council failed over a substantial period of time to comply with his obligations of disclosure as a councillor; (2) the plaintiff breached his obligations as a councillor by preferring the interests of his business and personal associates over his duties as a councillor." 7 The plaintiff has filed a reply, alleging that in publishing the matter complained of the defendant was actuated by express malice. The proceedings are fixed for hearing, with an estimated duration of two weeks, commencing on 26 May 2003. 8 It was in the course of preparation that the existence of the legal advice, to which the defendant now seeks access, came to light. On 19 February 2002 the defendant served upon the Council a subpoena requiring production of an extensive catalogue of documents, identified in thirty-three separate categories. One of these was: "27 Any correspondence between Marrickville Council and the Department of Local Government, and any report or reports from the Department of Local Government, concerning the Marrickville Council Civic Centre project." 9 Between 5 March and 2 May 2002 the Council produced a number of documents in response to this subpoena and access was granted to the plaintiff and the defendant. There was some continued correspondence between the defendant and the Council concerning the adequacy of the Council's response to the subpoena. By letter dated 17 April 2002 the solicitors acting for the defendant requested the Council to search its records to locate a number of identified documents or categories of documents, including: "5 All documents provided by Marrickville Council to the Department of Local Government to enable it to conduct its enquiry into the entire process of the Civic Centre development which was requested by the Council in a letter to the Department of Local Government dated 18 April 1997." 10 Among the documents thereupon produced was a copy of a letter dated 17 July 1997 signed by Ms Candy Nay, the acting General Manager of the Council, to Mr G Payne, the Director General of the Department of Local Government. She extracted the resolution of 15 April 1997 and provided to Mr Payne a copy of the legal advice the Council had received from Phillips Fox. Ms Nay took some trouble to ensure that the advice was treated as confidential. The letter appears to have been accompanied by a copy of a business paper for the Council meeting of 20 May 1997, when the advice had been handed to Council. In the business paper it was stated that the advice was: " … attached as a CONFIDENTIAL ATTACHMENT under the provisions of s10(2)(f) because it relates to the receipt and consideration of legal advice which would otherwise be privileged from production in legal proceedings on the ground of legal professional privilege." 11 The reference to s10(2)(f) was a reference to a provision of the Local Government Act 1993. It is a provision which permitted a council to cause a meeting, which is otherwise required to be open, to be closed to the public, where legal advice which would otherwise be privileged, is to be discussed. Ms Nay's reference to the sub-paragraph appears to me to be misconceived. However, her intent to assure the continued confidentiality of the Phillips Fox advice is plain. A recommendation to the Council that the legal advice be received and noted, and treated as confidential, was included in the papers and the reasons earlier expressed were repeated. Also with the papers sent to Mr Payne was what appears to be a coversheet, again containing the notation, in bold letters, that the document was confidential, again stating the same reason. 12 Also produced by the Council in response to the subpoena was a letter dated 10 November 1997 from Mr Payne to Ms Nay. Mr Payne stated that an enquiry as to whether the plaintiff had breached the provisions of s451 of the Local Government Act had been completed and that no breach had been found. There follow two passages on which the defendant places reliance in support of its application for access to the legal advice. These are in the following terms: "It may be that in the future a particular matter before Council could require the Councillor [the plaintiff] to declare a pecuniary interest and otherwise comply with the requirements of s451 at that time. The Department notes that the Councillor is aware of this. It is noted that the Department's views accord in this regard with a legal opinion to Council from Phillips Fox, a copy of which has kindly been provided, in confidence, by you to the Department. I should add that another copy of the same opinion was provided to the Department by one of the Councillors." 13 Other material produced by the Council in response to the defendant's subpoena were papers prepared for a council meeting of 18 November 1997. In these papers the existence and contents of the legal advice was also mentioned. Referring to the Phillips Fox opinion, the papers contained the following: "The conclusion of the legal advice was that 'we have concluded from the files that you have referred to us, that there is no evidence of a breach by Councillor Cotter of any provision of the Local Government Act 1993 requiring disclosure of pecuniary interests'." 14 Finally, the Council produced an extract from a transcript of a tape recording of the Council meeting of 18 November 1997 in which the following is attributed to the plaintiff: "… it is a legal opinion from our legal advisors … and it supported me, it supported me …" * * * 15 It was common ground that the Evidence Act 1995 does not govern the law concerning legal professional privilege in relation to the production of documents in pre-trial procedures: Mann v Carnell [1999] HCA 66; 201 CLR 1; Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia [1999] HCA 67; 201 CLR 49. In the latter case, it was held that the test at common law for legal professional privilege in relation to documents was whether a communication was made or a document was prepared for the dominant purpose of the provision by a lawyer of legal advice or legal services and that that test should be applied to the discovery and inspection of confidential written communications between lawyer and clients. 16 On behalf of the defendant it was not suggested that this test had not been met and it was implicitly accepted that the advice to which it seeks access was, prima facie, subject to legal professional privilege. What was contended on behalf of the defendant was that the Council, in producing the various documents to which I have referred had, effectively, waived privilege. It was argued that the waiver was express, or, if not express, implicit. Having regard to the repeated insistence by Council officers, especially Ms Nay, on retaining the confidential nature of the advice, I am satisfied that there has been no express waiver. 17 In Mann v Carnell it was held that what brings about an implied waiver of legal professional privilege is inconsistency between the conduct of the person entitled to the benefit of confidentiality of communication between lawyer and client and maintenance of the confidentiality. In Attorney-General (NT) v Maurice (1986) 161 CLR 475 it was held that, in a case where there is no intentional waiver of privilege, the question of whether waiver should be imputed depends upon whether it would be unfair or misleading to allow a party to refer to or use material and yet assert that the material, or material associated with it, is privileged from production. This principle was adopted subsequently by the High Court in Goldberg v Ng (1995) 185 CLR 83. 18 In the joint judgment of Deane, Dawson and Gaudron JJ a passage from the joint judgment of Mason and Brennan JJ in Maurice was extracted. That passage was in the following terms: "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. …" 19 I think it is of some significance that production by the Council of the documents to which I have referred was made in pre-trial procedures and not by way of adducing evidence in the proceedings themselves. The mere fact that the defendant has been provided with documents which state that a legal opinion favourable to the plaintiff is in existence does not create any unfairness to the defendant. It might be different if some attempt were made to use the fact of the favourable legal opinion against the defendant in the hearing of the defamation claim, but for the moment, I have great difficulty in understanding how that document could be used in relation to the defences of justification and contextual truth or to the issue of malice. Counsel for the defendant suggested that the plaintiff might seek to use the existence of the favourable legal opinion in support of his claim for damages, as increasing the injury to his feelings by reason of the falsity of the imputations. It is premature to speculate that the plaintiff will so conduct his case. Should he do so, no doubt the trial judge will consider whether that circumstance affects the question of fairness. However, it has to be remembered that while it is the Council which is entitled to the privilege, it is not party to the proceedings. 20 I see no unfairness in what the Council has done to date, and, accordingly, and in accordance with the principles stated in Maurice and Ng, I am satisfied that an implied waiver of legal professional privilege should not be imputed to the Council. 21 Counsel for the defendant also suggested that unfairness might be created by the defendant's inability to obtain access to the advice because it would not be able to determine whether the advice was based upon an accurate account of the relevant facts and circumstances. It was to be expected that the advice itself, and in any event the materials provided to Phillips Fox for the purpose of the advice, would identify the factual basis of the opinion and that this might provide the defendant with material on which to cross-examine the plaintiff. There is no reason to believe that the hope that access to the documentation might reveal factual inaccuracy or worse is based on anything other than wishful thinking. The defendant is seeking to embark upon a fishing expedition. In any event, unfairness can only arise if and when the plaintiff seeks to use to his own advantage the favourable conclusion to which it is said the author of the advice came. 22 The notice of motion is dismissed with costs. **********