(b) a disclosure to a person with whom the client or party had, at the time of the disclosure, a common interest relating to a proceeding or an anticipated or pending proceeding in an Australian court or a foreign court.
50 Although s 122 of the Act refers to the "adducing of evidence" this Motion has been argued on the basis that the concept of privilege and its waiver (or "consent") applies to the discovery process. The relevant issue for decision is whether the defendant has consented to the discovery of the documents, over which it is claiming privilege, by reason of the pleading of the defences and the cross-claim.
51 Mr Williams submitted that "consent" within s 122(1) means express consent and does not include implied or imputed consent. He submitted that the use of the term "express or implied consent" in sub-section (4) and the failure to use that term in sub-section (1) supports such an interpretation. Mr Williams did not cite any authority in support of this submission. It is not supported by Telstra Corporation Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152 (Branson and Lehane JJ, Beaumont J dissenting), or the unanimous decision of the Full Federal Court (Ryan, Carr and Marshall JJ) in Perpetual Trustees (WA) Ltd v Equuscorp Pty Ltd [1999] FCA 925. In the light of these authorities I am of the view that "consent" in s 122(1) of the Act includes conduct amounting to imputed or implied waiver.
52 In the defence of economic duress, the onus is upon the defendant to establish that pressure was applied and that the pressure went beyond what the law is prepared to countenance as legitimate. Once that is established, the onus falls upon the plaintiff to establish that such pressure made no contribution to the defendant in entering into the agreement: Crescendo Management Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40.
53 In Crescendo Management McHugh JA said at 46:
The proper approach in my opinion is to ask whether any applied pressure induced the victim to enter into the contract and then ask whether that pressure went beyond what the law is prepared to countenance as legitimate?
….
It is unnecessary, however, for the victim to prove that the illegitimate pressure was the sole reason for him entering into the contract. It is sufficient that the illegitimate pressure was one of the reasons for the person entering into the agreement.
54 In his learned article Economic Duress - Wearing the Clothes of Unconscionable Conduct, Journal of Contract Law, Vol. 17 No. 1 at 1, R T McKeand, analyses Crescendo and other relevant cases to reach the conclusions, at 12, relevant to this application that (1)"it is sufficient if the pressure is a cause (though not an insignificant cause) of the giving of consent, even if the consent would have been given absent the duress complained of", (2) "once the evidence establishes that the pressure applied was illegitimate, the onus falls on the person applying the pressure to show that it made no contribution to entry into the transaction" and (3) "consideration of the will of the innocent party at the time of entry and the quality of consent are not relevant beyond the inquiry into causation".
55 The range of matters that did contribute to the defendant's entry into the agreement is relevant to the question of whether the illegitimate pressure made no contribution to the defendant's entry into the contract. Once the defendant pleads this defence he puts in issue what contributed to him entering into the agreement. The economic duress defence requires findings of fact as to whether the defendant was "induced" by the illegitimate pressure into entering into the agreement. In the s 52 defence the defendant has pleaded that he would not have executed the offer if the plaintiff had not made the representations. The surrounding circumstances at the time the defendant entered into the agreement and the range of factors weighing on the defendant's mind at the time he entered into the agreement have been made central to the issues in the case by the defendant's pleadings.
56 The plaintiff relies upon Telstra Corporation Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152 (Branson and Lehane JJ, Beaumont J dissenting), in particular to the majority decision at p 168 as follows:
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.
57 Mr Williams SC conceded that if Telstra v BT was decided correctly then his client's position as pleaded and as indicated in his statement falls within the above cited statement of the majority. However Mr Williams argued that I should not follow the majority in Telstra v BT and I should be persuaded to follow the approach adopted by Heerey J in Equuscorp Pty Ltd v Kamisha Corp Ltd (1999) ATPR 41-697, Conti J in John Tanner Holdings Pty Ltd v Mortgage Management Ltd (2001) 182 ALR 201, Sackville J in Australian Rugby Union Ltd v Hospitality Group Pty Ltd (1999) 165 ALR 253 and Wright J in Randell v Rockliffe (unreported, SC TAS, 9 December 1999).
58 Heery J, Sackville J and Conti J each referred to the decision of the Full Federal Court, (Black CJ, Beaumont, Sundberg, Merkel and Finkelstein JJ) in Esso Australia Resources Ltd v Commissioner of Taxation (1998) 83 FCR 511, 159 ALR 664 in which Adelaide Steamship Co Ltd v Spalvins (1998) 81 FCR 360; 152 ALR 418 was overruled. Heery J declined to follow the majority in Telstra V BT upon the basis that the majority decision had been based upon the then overruled Adelaide Steamship Co case. Heery J concluded that he was required to apply the common law test unaffected by s 122 (1) of the Act. Both Conti J and Sackville J in their respective judgments in John Tanner and Australian Rugby Union referred to and agreed with Heery J's approach in Equuscorp and declined to follow the majority in Telstra v BT.
59 The decision of the Full Federal Court (Ryan, Carr and Marshall JJ) in Perpetual Trustees (WA) Ltd v Equuscorp Pty Ltd [1999] FCA 925 which although differently named was the appeal from Heery J's judgment in Equuscorp Pty Ltd v Kamisha Corp Ltd. The appeal was decided on 7 September 1999 after Sackville J's judgment (4 August 1999) but before Conti J's judgment (6 March 2001). It is apparent that counsel before Conti J also relied upon Heery J's judgment without informing his Honour that Heery J's judgment had been overturned on appeal. Certainly there is no mention in Conti J's judgment of the appeal.
60 Wright J in Randell v Rockliffe did refer to the appeal judgment in Equuscorp stating at [13] that notwithstanding that the majority opinion in Testra v BT was unanimously followed in the appeal he was "not persuaded that the principles embraced are correct". His Honour said:
[14] The Full Court in upholding the appeal, did not resort to principles of stare decisis but chose to follow Branson and Lehane JJ on the basis that their views were correct. However, they also pointed out that in the case before them there had been more than "a mere pleading of reliance". They said:
"There is the added ingredient of evidence that legal advice was sought and obtained at a relevantly material time. There is also the plea of rectification".
[15] With all respect to the considerable weight of opinion to the contrary in the Federal Court judgments referred to, I remain unpersuaded that Beaumont's approach was wrong. Indeed, I think it was correct and should be followed. In reaching this conclusion I have been mindful of the issues of comity and constraint to which I referred in Carrick v J [1989] Tas R 24 at 35-36.
61 In the appeal in Equuscorp the Court expressed the view that Heery J had taken a somewhat restrictive view of the guidance to be obtained from the reasons of the majority in Telstra v BT. The Court said:
[9] The majority held that conduct which would amount to imputed waiver at common law came within the meaning of "consent" in s 122(1) of the Evidence Act (see 648-649). Their Honours did not identify any difference between imputed waiver at common law and implied consent within the meaning of the sub-section. They thus applied the familiar common law principles of unfairness to what they identified as issue waiver, leaving aside (at 647) the question, decided in Adelaide Steamship (at 426-429), whether the common law relating to disclosure waiver had been changed by s 122(2) and (4) which were not concerned with any principles of fairness. Beaumont J's reasoning in Telstra (at 641) on whether conduct which amounted to imputed waiver at common law would also amount to consent within s 122(1) is consistent with the view of the majority. Their Honours relevantly differed on whether the circumstances permitted a waiver of privilege to be imputed at that stage of the proceedings. The majority discussed (from the last paragraph on p 645 through to page 648) the common law position and reviewed many of the leading authorities at common law concerning imputed waiver of privilege.
[10] The derivative change to the common law, temporarily worked by Adelaide Steamship and disapproved of in Esso, was that the common law relating to legal professional privilege at the discovery stage of proceedings had been changed so as to make that privilege available where the dominant, rather than the sole, purpose of a communication was the obtaining of legal advice. Furthermore, in so far as previously established principles of common law were inconsistent with the Evidence Act and its purposes, they were to be taken as modified correspondingly so as to avoid such inconsistency (see 429). The inconsistency which the Full Court identified in Adelaide Steamship related to the common law principles of unfairness in their application to disclosure waiver. As we have mentioned, the majority in Telstra construed s 122(1) of the Evidence Act on the basis that the word "consent" in that subsection extended to conduct which would amount to an imputed waiver at common law.